Republic of the Philippines SECTION 4.

DEPENDENTS’ GROUP
SUPREME COURT HOSPITALIZATION INSURANCE – The COMPANY
Manila shall obtain group hospitalization insurance coverage
or assume under a self-insurance basis
SECOND DIVISION hospitalization for the dependents of regular
employees up to a maximum amount of forty
G.R. No. 175773               June 17, 2013 thousand pesos (₱40,000.00) per confinement subject
to the following:
MITSUBISHI MOTORS PHILIPPINES SALARIED
EMPLOYEES UNION (MMPSEU), Petitioner,  a. The room and board must not exceed three
vs. hundred pesos (₱300.00) per day up to a
MITSUBISHI MOTORS PHILIPPINES maximum of thirty-one (31) days. Similarly,
CORPORATION, Respondent. Doctor’s Call fees must not exceed three
hundred pesos (₱300.00) per day for a
maximum of thirty-one (31) days. Any excess
DECISION
of this amount shall be borne by the
employee.
DEL CASTILLO, J.:
b. Confinement must be in a hospital
The Collective Bargaining Agreement (CBA) of the designated by the COMPANY. For this
parties in this case provides that the company purpose, the COMPANY shall designate
shoulder the hospitalization expenses of the hospitals in different convenient places to be
dependents of covered employees subject to certain availed of by the dependents of employees. In
limitations and restrictions. Accordingly, covered cases of emergency where the dependent is
employees pay part of the hospitalization insurance confined without the recommendation of the
premium through monthly salary deduction while the company doctor or in a hospital not
company, upon hospitalization of the covered designated by the COMPANY, the COMPANY
employees' dependents, shall pay the hospitalization shall look into the circumstances of such
expenses incurred for the same. The conflict arose confinement and arrange for the payment of
when a portion of the hospitalization expenses of the the amount to the extent of the hospitalization
covered employees' dependents were benefit.
paid/shouldered by the dependent's own health
insurance. While the company refused to pay the
c. The limitations and restrictions listed in
portion of the hospital expenses already shouldered
Annex "B" must be observed.
by the dependents' own health insurance, the union
insists that the covered employees are entitled to the
whole and undiminished amount of said hospital d. Payment shall be direct to the hospital and
expenses. doctor and must be covered by actual billings.

By this Petition for Review on Certiorari,1 petitioner Each employee shall pay one hundred pesos
Mitsubishi Motors Philippines Salaried Employees (₱100.00) per month through salary deduction as his
Union (MMPSEU) assails the March 31, 2006 share in the payment of the insurance premium for the
Decision2 and December 5, 2006 Resolution3 of the above coverage with the balance of the premium to
Court of Appeals (CA) in CA-G.R. SP No. 75630, be paid by the COMPANY. If the COMPANY is self-
which reversed and set aside the Voluntary insured the one hundred pesos (₱100.00) per
Arbitrator’s December 3, 2002 Decision4 and declared employee monthly contribution shall be given to the
respondent Mitsubishi Motors Philippines Corporation COMPANY which shall shoulder the expenses subject
(MMPC) to be under no legal obligation to pay its to the above level of benefits and subject to the same
covered employees’ dependents’ hospitalization limitations and restrictions provided for in Annex "B"
expenses which were already shouldered by other hereof.
health insurance companies.
The hospitalization expenses must be covered by
Factual Antecedents actual hospital and doctor’s bills and any amount in
excess of the above mentioned level of benefits will
be for the account of the employee.
The parties’ CBA5 covering the period August 1, 1996
to July 31, 1999 provides for the hospitalization
insurance benefits for the covered dependents, thus: For purposes of this provision, eligible dependents are
the covered employees’ natural parents, legal spouse
and legitimate or legally adopted or step children who
are unmarried, unemployed who have not attained result if the said employees would receive from the
twenty-one (21) years of age and wholly dependent company the full amount of hospitalization expenses
upon the employee for support. despite having already received payment of portions
thereof from other health insurance providers.
This provision applies only in cases of actual
confinement in the hospital for at least six (6) hours. This prompted the MMPSEU President to write the
MMPC President17 demanding full payment of the
Maternity cases are not covered by this section but hospitalization benefits. Alleging discrimination
will be under the next succeeding section on maternity against MMPSEU union members, she pointed out
benefits.6 that full reimbursement was given in a similar claim
filed by Luisito Cruz (Cruz), a member of the Hourly
When the CBA expired on July 31, 1999, the parties Union. In a letter-reply,18 MMPC, through its Vice-
executed another CBA7 effective August 1, 1999 to President for Industrial Relations Division, clarified
July 31, 2002 incorporating the same provisions on that the claims of the said MMPSEU members have
dependents’ hospitalization insurance benefits but in already been paid on the basis of official receipts
the increased amount of ₱50,000.00. The room and submitted. It also denied the charge of discrimination
board expenses, as well as the doctor’s call fees, and explained that the case of Cruz involved an
were also increased to ₱375.00. entirely different matter since it concerned the
admissibility of certified true copies of documents for
reimbursement purposes, which case had been
On separate occasions, three members of MMPSEU,
settled through voluntary arbitration.
namely, Ernesto Calida (Calida), Hermie Juan Oabel
(Oabel) and Jocelyn Martin (Martin), filed claims for
reimbursement of hospitalization expenses of their On August 28, 2000, MMPSEU referred the dispute to
dependents. the National Conciliation and Mediation Board and
requested for preventive mediation. 19
MMPC paid only a portion of their hospitalization
insurance claims, not the full amount. In the case of Proceedings before the Voluntary Arbitrator
Calida, his wife, Lanie, was confined at Sto. Tomas
University Hospital from September 4 to 9, 1998 due On October 3, 2000, the case was referred to
to Thyroidectomy. The medical expenses incurred Voluntary Arbitrator Rolando Capocyan for resolution
totalled ₱29,967.10. Of this amount, ₱9,000.00 of the issue involving the interpretation of the subject
representing professional fees was paid by MEDICard CBA provision.20
Philippines, Inc. (MEDICard) which provides health
maintenance to Lanie.8 MMPC only paid MMPSEU alleged that there is nothing in the CBA
₱12,148.63.  It did not pay the ₱9,000.00 already paid
9
which prohibits an employee from obtaining other
by MEDICard and the ₱6,278.47 not covered by insurance or declares that medical expenses can be
official receipts. It refused to give to Calida the reimbursed only upon presentation of original official
difference between the amount of medical expenses receipts. It stressed that the hospitalization benefits
of ₱27,427.1010 which he claimed to be entitled to should be computed based on the formula indicated in
under the CBA and the ₱12,148.63 which MMPC the CBA without deducting the benefits derived from
directly paid to the hospital. other insurance providers. Besides, if reduction is
permitted, MMPC would be unjustly benefited from
In the case of Martin, his father, Jose, was admitted at the monthly premium contributed by the employees
The Medical City from March 26 to 27, 2000 due to through salary deduction. MMPSEU added that its
Acid Peptic Disease and incurred medical expenses members had legitimate claims under the CBA and
amounting to ₱9,101.30.14 MEDICard paid that any doubt as to any of its provisions should be
₱8,496.00. Consequently,
15
MMPC only paid resolved in favor of its members. Moreover, any
₱288.40,16 after deducting from the total medical ambiguity should be resolved in favor of labor. 21
expenses the amount paid by MEDICard and the
₱316.90 discount given by the hospital. On the other hand, MMPC argued that the
reimbursement of the entire amounts being claimed
Claiming that under the CBA, they are entitled to by the covered employees, including those already
hospital benefits amounting to ₱27,427.10, ₱6,769.35 paid by other insurance companies, would constitute
and ₱8,123.80, respectively, which should not be double indemnity or double insurance, which is
reduced by the amounts paid by MEDICard and by circumscribed under the Insurance Code. Moreover, a
Prosper, Calida, Oabel and Martin asked for contract of insurance is a contract of indemnity and
reimbursement from MMPC. However, MMPC denied the employees cannot be allowed to profit from their
the claims contending that double insurance would dependents’ loss.22
Meanwhile, the parties separately sought for a legal On December 3, 2002, the Voluntary Arbitrator
opinion from the Insurance Commission relative to the rendered a Decision27 finding MMPC liable to pay or
issue at hand. In its letter 23 to the Insurance reimburse the amount of hospitalization expenses
Commission, MMPC requested for confirmation of its already paid by other health insurance companies.
position that the covered employees cannot claim The Voluntary Arbitrator held that the employees may
insurance benefits for a loss that had already been demand simultaneous payment from both the CBA
covered or paid by another insurance company. and their dependents’ separate health insurance
However, the Office of the Insurance Commission without resulting to double insurance, since separate
opted not to render an opinion on the matter as the premiums were paid for each contract. He also noted
same may become the subject of a formal complaint that the CBA does not prohibit reimbursement in case
before it.24 On the other hand, when queried by there are other health insurers.
MMPSEU,25the Insurance Commission, through Atty.
Richard David C. Funk II (Atty. Funk) of the Claims Proceedings before the Court of Appeals
Adjudication Division, rendered an opinion contained
in a letter,26 viz: MMPC filed a Petition for Review with Prayer for the
Issuance of a Temporary Restraining Order and/or
Ms. Cecilia L. ParasPresident Writ of Preliminary Injunction28 before the CA. It
Mitsubishi Motors Phils. claimed that the Voluntary Arbitrator committed grave
abuse of discretion in not finding that recovery under
[Salaried] Employees Union both insurance policies constitutes double insurance
Ortigas Avenue Extension, as both had the same subject matter, interest insured
Cainta, Rizal and risk or peril insured against; in relying solely on
the unauthorized legal opinion of Atty. Funk; and in
Madam: not finding that the employees will be benefited twice
for the same loss. In its Comment, 29 MMPSEU
We acknowledge receipt of your letter which, to our countered that MMPC will unjustly enrich itself and
impression, basically poses the question of whether or profit from the monthly premiums paid if full
not recovery of medical expenses from a Health reimbursement is not made.
Maintenance Organization bars recovery of the same
reimbursable amount of medical expenses under a On March 31, 2006, the CA found merit in MMPC’s
contract of health or medical insurance. Petition. It ruled that despite the lack of a provision
which bars recovery in case of payment by other
We wish to opine that in cases of claims for insurers, the wordings of the subject provision of the
reimbursement of medical expenses where there are CBA showed that the parties intended to make MMPC
two contracts providing benefits to that effect, liable only for expenses actually incurred by an
recovery may be had on both simultaneously. In the employee’s qualified dependent. In particular, the
absence of an Other Insurance provision in these provision stipulates that payment should be made
coverages, the courts have uniformly held that an directly to the hospital and that the claim should be
insured is entitled to receive the insurance benefits supported by actual hospital and doctor’s bills. These
without regard to the amount of total benefits provided mean that the employees shall only be paid amounts
by other insurance. (INSURANCE LAW, A Guide to not covered by other health insurance and is more in
Fundamental Principles, Legal Doctrines, and keeping with the principle of indemnity in insurance
Commercial Practices; Robert E. Keeton, Alau I. contracts. Besides, a contrary interpretation would
Widiss, p. 261). The result is consistent with the public "allow unscrupulous employees to unduly profit from
policy underlying the collateral source rule – that is, x the x x x benefits" and shall "open the floodgates to
x x the courts have usually concluded that the liability questionable claims x x x."30
of a health or accident insurer is not reduced by other
possible sources of indemnification or compensation. The dispositive portion of the CA Decision31 reads:
(ibid).
WHEREFORE, the instant petition is GRANTED. The
Very truly yours, decision of the voluntary arbitrator dated December 3,
2002 is REVERSED and SET ASIDE and judgment is
RICHARD DAVID C. FUNK II rendered declaring that under Art. XI, Sec. 4 of the
Officer-in-Charge Collective Bargaining Agreement between petitioner
Claims Adjudication Division and respondent effective August 1, 1999 to July 31,
2002, the former’s obligation to reimburse the Union
members for the hospitalization expenses incurred by
(SGD.)
Attorney IV
their dependents is exclusive of those paid by the D.
Union members to the hospital.
THE COURT OF APPEALS GRAVELY ERRED IN
SO ORDERED.32 GIVING MORE IMPORTANCE TO A POSSIBLE,
HENCE MERELY SPECULATIVE, ABUSE BY
In its Motion for Reconsideration, 33 MMPSEU pointed EMPLOYEES OF THE BENEFITS IF DOUBLE
out that the alleged oppression that may be RECOVERY WERE ALLOWED INSTEAD OF THE
committed by abusive employees is a mere possibility REAL INJURY TO THE EMPLOYEES WHO ARE
whereas the resulting losses to the employees are PAYING FOR THE CBA HOSPITALIZATION
real. MMPSEU cited Samsel v. Allstate Insurance BENEFITS THROUGH MONTHLY SALARY
Co.,34 wherein the Arizona Supreme Court explicitly DEDUCTIONS BUT WHO MAY NOT BE ABLE TO
ruled that an insured may recover from separate AVAIL OF THE SAME IF THEY OR THEIR
health insurance providers, regardless of whether one DEPENDENTS HAVE OTHER HEALTH
of them has already paid the medical expenses INSURANCE.37
incurred. On the other hand, MMPC argued in its
Comment35 that the cited foreign case involves a MMPSEU avers that the Decision of the Voluntary
different set of facts. Arbitrator deserves utmost respect and finality
because it is supported by substantial evidence and is
The CA, in its Resolution36 dated December 5, 2006, in accordance with the opinion rendered by the
denied MMPSEU’s motion. Insurance Commission, an agency equipped with vast
knowledge concerning insurance contracts. It
Hence, this Petition. maintains that under the CBA, member-employees
are entitled to full reimbursement of medical expenses
incurred by their dependents regardless of any
Issues
amounts paid by the latter’s health insurance provider.
Otherwise, non-recovery will constitute unjust
MMPSEU presented the following grounds in support enrichment on the part of MMPC. It avers that
of its Petition: recovery from both the CBA and other insurance
companies is allowed under their CBA and not
A. prohibited by law nor by jurisprudence.

THE COURT OF APPEALS SERIOUSLY ERRED Our Ruling

WHEN IT REVERSED THE DECISION DATED 03
[DECEMBER] 2002 OF THE VOLUNTARY The Petition has no merit.
ARBITRATOR BELOW WHEN THE SAME WAS
SUPPORTED BY SUBSTANTIAL EVIDENCE,
Atty. Funk erred in applying the
INCLUDING THE OPINION OF THE INSURANCE
collateral source rule.
COMMISSION THAT RECOVERY FROM BOTH THE
CBA AND SEPARATE HEALTH CARDS IS NOT
PROHIBITED IN THE ABSENCE OF ANY SPECIFIC The Voluntary Arbitrator based his ruling on the
PROVISION IN THE CBA. opinion of Atty. Funk that the employees may recover
benefits from different insurance providers without
regard to the amount of benefits paid by each.
B.
According to him, this view is consistent with the
theory of the collateral source rule.
THE COURT OF APPEALS COMMITTED
REVERSIBLE ERROR IN OVERTURNING THE
As part of American personal injury law, the collateral
DECISION OF THE VOLUNTARY ARBITRATOR
source rule was originally applied to tort cases
WITHOUT EVEN GIVING ANY LEGAL OR
wherein the defendant is prevented from benefiting
JUSTIFIABLE BASIS FOR SUCH REVERSAL.
from the plaintiff’s receipt of money from other
sources.38 Under this rule, if an injured person
C. receives compensation for his injuries from a source
wholly independent of the tortfeasor, the payment
THE COURT OF APPEALS COMMITTED GRAVE should not be deducted from the damages which he
ERROR IN REFUSING TO CONSIDER OR EVEN would otherwise collect from the tortfeasor. 39 In a
MENTION ANYTHING ABOUT THE AMERICAN recent Decision40 by the Illinois Supreme Court, the
AUTHORITIES CITED IN THE RECORDS THAT DO rule has been described as "an established exception
NOT PROHIBIT, BUT IN FACT ALLOW, RECOVERY to the general rule that damages in negligence actions
FROM TWO SEPARATE HEALTH PLANS. must be compensatory." The Court went on to explain
that although the rule appears to allow a double already paid by other health insurance companies
recovery, the collateral source will have a lien or based on the theory of collateral source rule.
subrogation right to prevent such a double
recovery.41 In Mitchell v. Haldar,42 the collateral source The conditions set forth in the CBA provision indicate
rule was rationalized by the Supreme Court of an intention to limit MMPC’s liability only to actual
Delaware: expenses incurred by the employees’ dependents,
that is, excluding the amounts paid by dependents’
The collateral source rule is ‘predicated on the theory other health insurance providers.
that a tortfeasor has no interest in, and therefore no
right to benefit from monies received by the injured The Voluntary Arbitrator ruled that the CBA has no
person from sources unconnected with the express provision barring claims for hospitalization
defendant’. According to the collateral source rule, ‘a expenses already paid by other insurers. Hence, the
tortfeasor has no right to any mitigation of damages covered employees can recover from both. The CA
because of payments or compensation received by did not agree, saying that the conditions set forth in
the injured person from an independent source.’ The the CBA implied an intention of the parties to limit
rationale for the collateral source rule is based upon MMPC’s liability only to the extent of the expenses
the quasi-punitive nature of tort law liability. It has actually incurred by their dependents which excludes
been explained as follows: the amounts shouldered by other health insurance
companies.
The collateral source rule is designed to strike a
balance between two competing principles of tort law: We agree with the CA. The condition that payment
(1) a plaintiff is entitled to compensation sufficient to should be direct to the hospital and doctor implies that
make him whole, but no more; and (2) a defendant is MMPC is only liable to pay medical expenses actually
liable for all damages that proximately result from his shouldered by the employees’ dependents. It follows
wrong. A plaintiff who receives a double recovery for a that MMPC’s liability is limited, that is, it does not
single tort enjoys a windfall; a defendant who include the amounts paid by other health insurance
escapes, in whole or in part, liability for his wrong providers. This condition is obviously intended to
enjoys a windfall. Because the law must sanction one thwart not only fraudulent claims but also double
windfall and deny the other, it favors the victim of the claims for the same loss of the dependents of covered
wrong rather than the wrongdoer. employees.

Thus, the tortfeasor is required to bear the cost for the It is well to note at this point that the CBA constitutes
full value of his or her negligent conduct even if it a contract between the parties and as such, it should
results in a windfall for the innocent plaintiff. (Citations be strictly construed for the purpose of limiting the
omitted) amount of the employer’s liability.46 The terms of the
subject provision are clear and provide no room for
As seen, the collateral source rule applies in order to any other interpretation. As there is no ambiguity, the
place the responsibility for losses on the party causing terms must be taken in their plain, ordinary and
them.43Its application is justified so that "'the popular sense.47 Consequently, MMPSEU cannot rely
wrongdoer should not benefit from the expenditures on the rule that a contract of insurance is to be
made by the injured party or take advantage of liberally construed in favor of the insured. Neither can
contracts or other relations that may exist between the it rely on the theory that any doubt must be resolved
injured party and third persons." 44Thus, it finds no in favor of labor.
application to cases involving no-fault insurances
under which the insured is indemnified for losses by Samsel v. Allstate Insurance Co. is not
insurance companies, regardless of who was at fault on all fours with the case at bar.
in the incident generating the losses. 45 Here, it is clear
that MMPC is a no-fault insurer. Hence, it cannot be MMPSEU cannot rely on Samsel v. Allstate Insurance
obliged to pay the hospitalization expenses of the Co. where the Supreme Court of Arizona allowed the
dependents of its employees which had already been insured to enjoy medical benefits under an automobile
paid by separate health insurance providers of said policy insurance despite being able to also recover
dependents. from a separate health insurer. In that case, the
Allstate automobile policy does not contain any clause
The Voluntary Arbitrator therefore erred in adopting restricting medical payment coverage to expenses
Atty. Funk’s view that the covered employees are actually paid by the insured nor does it specifically
entitled to full payment of the hospital expenses provide for reduction of medical payments benefits by
incurred by their dependents, including the amounts a coordination of benefits.48 However, in the case
before us, the dependents’ group hospitalization
insurance provision in the CBA specifically contains a WHEREFORE, the Petition is DENIED. The Decision
condition which limits MMPC’s liability only up to the dated March 31, 2006 and Resolution dated
extent of the expenses that should be paid by the December 5, 2006 of the Court of Appeals in CA-G.R.
covered employee’s dependent to the hospital and SP No. 75630, are AFFIRMED.
doctor. This is evident from the portion which states
that "payment by MMPC shall be direct to the hospital SO ORDERED.
and doctor."49 In contrast, the Allstate automobile
policy expressly gives Allstate the authority to pay
directly to the insured person or on the latter’s behalf
all reasonable expenses actually incurred. Therefore,
reliance on Samsel is unavailing because the facts
therein are different and not decisive of the issues in
the present case.

To allow reimbursement of amounts paid

under other insurance policies shall
constitute double recovery which is not
sanctioned by law.

MMPSEU insists that MMPC is also liable for the SECOND DIVISION
amounts covered under other insurance policies;
otherwise, MMPC will unjustly profit from the G.R. No. 131399             October 17, 2003
premiums the employees contribute through monthly
salary deductions.
ANGELITA AMPARO GO, petitioner, 
vs.
This contention is unmeritorious. OFFICE OF THE OMBUDSMAN, INSURANCE
COMMISSIONER EDUARDO T. MALINIS and
To constitute unjust enrichment, it must be shown that NORBERTO F. CASTRO, respondents.
a party was unjustly enriched in the sense that the
term unjustly could mean illegally or unlawfully.50 A DECISION
claim for unjust enrichment fails when the person who
will benefit has a valid claim to such benefit. 51
AUSTRIA-MARTINEZ, J.:
The CBA has provided for MMPC’s limited liability
In this petition for review on certiorari under Rule 45 of
which extends only up to the amount to be paid to the
the Rules of Court, petitioner Angelita Amparo Go
hospital and doctor by the employees’ dependents,
seeks the reversal of the Resolution of the Office of
excluding those paid by other insurers. Consequently,
the Ombudsman in OMB-0-96-2225 dismissing her
the covered employees will not receive more than
charges against Insurance Commissioner Eduardo T.
what is due them; neither is MMPC under any
Malinis and Hearing Officer Norberto F. Castro for
obligation to give more than what is due under the
Violation of Section 3 [e] of Republic Act No. 3019,
CBA.
otherwise known as Anti-Graft and Corrupt Practices
Act, which provides:
Moreover, since the subject CBA provision is an
insurance contract, the rights and obligations of the
Sec. 3. Corrupt practices of public officers. -- In
parties must be determined in accordance with the
addition to acts omissions of public officers already
general principles of insurance law. 52 Being in the
penalized by existing law, the following shall
nature of a non-life insurance contract and essentially
constitute corrupt practices of any public officer and
a contract of indemnity, the CBA provision obligates
are hereby declared to be unlawful:
MMPC to indemnify the covered employees’ medical
expenses incurred by their dependents but only up to
the extent of the expenses actually incurred. 53 This is ...
consistent with the principle of indemnity which
proscribes the insured from recovering greater than (e) Causing any undue injury to any party, including
the loss.54 Indeed, to profit from a loss will lead to the Government, or giving any private party any
unjust enrichment and therefore should not be unwarranted benefits, advantage or preference in the
countenanced. As aptly ruled by the CA, to grant the discharge of his official, administrative or judicial
claims of MMPSEU will permit possible abuse by functions through manifest partiality, evident bad faith
employees. or gross inexcusable negligence. This provision shall
apply to officers and employees of offices or February 15, 1994 wherein petitioner and the
government corporations charged with the grant of insurance companies’ respective representatives met.
licenses or permits or other concessions. The insurers manifested their official stance to deny
the claims of petitioner. As a result, the conference
2 

The facts of the case are as follows: was terminated without prejudice to petitioner’s option
to pursue other legal remedies.3

Petitioner is the Treasurer and Vice-President of Wear

Me Garment Manufacturing Inc. whose business and Petitioner then sought the intercession of several
factory are located in Nadurata St., Grace Park, members and committees of the Legislature, such as,
Caloocan City. Due to a fire on July 12, 1993 that then Senate President Edgardo Angara, Senator 4 

gutted down Wear Me Garment’s factory as well as its Heherson Alvarez and the Senate Blue Ribbon
machineries and stocks, petitioner filed separate Committee and the House Committee on Banks and
5 

insurance claims against each of the following 14 Financial Intermediaries, accusing the Commission of
6 

insurance companies: acting in conspiracy with the insurance companies in

denying and delaying her claims. The legislators and
7 

(1) Prudential Guarentee & Assurance Inc. ₱ the committees sent communications to the
5,000,000.00 Commission regarding petitioner’s claims. Acting on
8 

the matter, the Commission conducted several

meetings with petitioner and the insurance companies
(2) Oriental Assutance Corporation ₱ 3,500,000.00
in order to settle the claims. The Commission
apprised the legislators and their committees of the
(3) Cibeles Insurance Corporation ₱ 1,000,000.00 actions taken by the Commission and vehemently
denied petitioner’s accusations.9

(4) Pioneer Asia Insurance Corporation ₱

1,500,000.00 On June 20, 1994, petitioner filed with the
Commission a complaint for Revocation and/or
(5) Western Guaranty Corp. ₱ 2,500,000.00 Suspension of Licenses against the fourteen
insurance companies, docketed as Adm. Case No.
(6) Liberty Insurance Corporation ₱ 4,000,000.00 RD-156, based on alleged violation by the insurance
companies and their respective adjusters of Section
(7) Filipino Merchants Insurance Co. ₱ 1,000,000.00 241 (b), (c), (d) and (e) of the Insurance Code, as
amended, to wit:
(8) Reliance Surety & Insurance Co., Inc. ₱
500,000.00 SEC. 241. (1) No insurance company doing business
in the Philippines shall refuse, without just cause, to
(9) Central Surety & Insurance Co. ₱ 2,000,000.00 pay or settle claims arising under coverages provided
by its policies, nor shall any such company engage in
(10) Phil. British Assurance Corporation ₱ unfair claim settlement practices. Any of the following
1,500,000.00 acts by an insurance company, if committed without
just cause and performed with such frequency as to
indicate a general business practice, shall constitute
(11) Philippine First Insurance Co., Inc. ₱ unfair claim settlement practices:
1,500,000.00
...
(12) Blue Cross Insurance Co., Inc. ₱ 2,500,000.00
(b) Failing to acknowledge with reasonable
(13) Commonwealth Insurance Co. ₱ 2,000,000.00 promptness pertinent communications with respect to
claims arising under its policies;
(14) Imperial Insurance Co. Inc. ₱ 1,278,000.00
(c) Failing to adopt and implement reasonable
which total ₱29,778,000.00. standards for the the prompt investigation of claims
arising under its policies;
Feeling that the resolutions of her claims have been
unduly delayed, petitioner sought the assistance of (d) Not attempting in good faith to effectuate prompt,
the Insurance Commission (Commission for brevity) fair and equitable settlement of claims submitted in
through her letter dated January 18, 1994. Acting on
1 
which liability has become reasonably clear; or
said letter, the Public Assistance & Information
Division of the Commission held a conference on
(e) Compelling policyholders to institute suits to Section 3 [e] of Rep. Act No. 3019, as herein quoted
recover amounts due under its policies by offering earlier.
without justifiable reason substantially less than the
amount ultimately recovered in suits brought by them. In a gist, petitioner alleges in her Complaint-Affidavit,
as follows:
mandating prompt investigation and settlement of
claims.10
Some time in March 1994, petitioner went to the office
of respondent Commissioner Malinis to discuss her
Consequently, the Commission informed the claims and he informed her that he can settle the
concerned legislative bodies that they could not claims. However, because respondent Malinis did not
mediate any longer petitioner’s claims against the fulfill his promise, she decided to file Adm. Case No.
insurers because to do so will conflict with its position RD-156, which was raffled to respondent Castro.
to maintain strict impartiality in the adjudication of Petitioner again visited respondent Malinis on May 20,
Adm. Case No. RD-156. 11
1994, and the latter told her that he will settle the
claims if she gives him 50% of it. In order for petitioner
Preliminary hearings were conducted in Adm. Case to accede to respondent Malinis’ demand, he ordered
No. RD-156. On November 24, 1994, the complaint
12  Castro to conduct separate hearings on the claims.
was amended including therein several adjusters as Castro admitted to petitioner that it was respondent
party-defendants. Petitioner also filed a Joint
13  Malinis who instructed him to conduct separate
Affidavit, together with her husband, and a Motion to
14  hearings. Petitioner asked respondent Malinis to
Admit Amended Complaint and Affidavit in Lieu of consolidate the hearings but instead, Malinis again
Direct Testimony. 15 propositioned that he will settle her claims if petitioner
gives him 50%. Respondent Malinis then ordered the
On February 27, 1995, while Adm. Case No. RD-156 suspension of Adm. Case No. RD-156 in his Order
is pending before the Commission, petitioner filed with dated August 29, 1995, which is patently void since
the Regional Trial Court of Quezon City (Branch 222) he was not the hearing officer, and the order violates
a civil case for Specific Performance with Damages, E.O. No. 26 and Insurance Circular Memorandum 1-
docketed as Civil Case No. Q-95-23135, against the 93 on the early disposition of insurance claims. 23

same defendants in Adm. Case No. RD-156. The 16 

complaint prayed that defendants be ordered to In his Counter-Affidavit, respondent Malinis denies
perform their respective obligations as insurers under petitioner’s allegations. He contends that the
24 

the insurance policies and to pay damages and Commission attended to petitioner’s claims as early
attorney’s fees. 17 as January 1994 and that despite the fact that it was
beyond the jurisdiction of the Commission and the
On March 28, 1995, the pre-trial in Adm. Case No. insurance companies refused to grant the claims, he
RD-156 was terminated and consolidated hearings on nevertheless exerted efforts to mediate the dispute. 25

the case ensued. In its Order dated May 17, 1995,

18 

the Commission admitted petitioner’s Amended Respondent Castro also denies petitioner’s
Complaint and Joint Affidavit. Consolidated/joint
19  accusations. He maintains that he did not tell
hearings on the case then proceeded. 20 petitioner that the holding of separate hearings was
upon the instructions of Commissioner Malinis, as in
On motion to dismiss by two of the insurers, the fact, records show that joint hearings were held in
Commission ordered the suspension of Adm. Case Adm. Case No. RD-156; and, that the suspension of
No. RD-156 until final determination of Civil Case No. Adm. Case No. RD-156 was based on a motion to
Q-95-23135. The Commission was of the opinion that
21  dismiss filed by the insurance companies, after due
the administrative case for revocation/suspension of hearing on the motion. 26

license of respondents and the civil case for specific

performance with the Regional Trial Court involve the Graft Investigation Officer Ginez-Jabalde
same set of parties, facts and circumstances; and that recommended the dismissal of the charges against
the determination by the Commission of the validity of respondents per Resolution dated January 13, 1997.
the claims might conflict with that of the court, or vice- However, Ombudsman Desierto ordered further
versa.22 clarificatory hearings. On March 18, 1997, a
27 

clarificatory hearing was held wherein respondent

Aggrieved, petitioner filed with the Office of the Castro explained that although he scheduled separate
Ombudsman a Complaint-Affidavit against hearings, it was because the situation called for it as
Commissioner Malinis and Hearing Officer Castro of there were various insurance companies, adjusters
the Regulation Division, charging them of Violation of and issues involved in the claims. 28
Thereafter, the Ombudsman approved the regard the charge against respondent Eduardo T.
recommendation of the Graft Investigation Officer to Malinis and Norberto F. Castro as if it does not exist
dismiss the charges against respondents. Upon 29 
at all.
32

denial by the Ombudsman of her motion for

reconsideration, petitioner filed the present petition
30 
Petitioner insists that the filing of Civil Case No. Q-95-
for review on certiorari. 23135 before the regular court does not abate or
suspend the proceedings in Adm. Case No. RD-156.
Petitioner raises the following issues: Petitioner argues further that the holding of separate
hearings violates her constitutional right to the speedy
CAN AN ADMINISTRATIVE CASE PENDING disposition of her case.
BEFORE AN ADMINISTRATIVE TRIBUNAL BE
PURSUED UNABATED AND INDEPENDENTLY It has been the Court’s policy to refrain from
DESPITE SUBSEQUENT FILING OF A CIVIL CASE interfering with the Ombudsman’s exercise of its
IN A REGULAR COURT OF JUSTICE WHEREIN IN investigatory and prosecutory powers, unless there
BOTH CASES, IT (sic) INVOLVE THE SAME are good and compelling reasons to rule
PARTIES AND RELATIVELY INVOLVE THE SAME otherwise. We find no cogent reason that justifies the
33 

INCIDENT? reversal of the dismissal of the charges against

respondents.
WHETHER THE CONDUCT OF A (sic) SEPARATE
HEARINGS FOR EACH RESPONDENTS (sic) In her Affidavits, petitioner alleges that respondent
CONSISTING OF FOURTEEN (14) INSURANCE Malinis’ act of demanding 50% of the insurance
COMPANIES AND SIX (6) ADJUSTMENT claims, instructing respondent Castro to conduct
COMPANIES ON THE ONE HAND AND ONE (1) separate hearings, and suspending Adm. Case No.
COMPLAINANT ON THE OTHER HAND, RD-156, caused her undue injury and gave the
RESORTED BY THE HEARING OFFICER IN AN insurance companies unwarranted benefits,
ADMINISTRATIVE CASE PREDICATED ON THE advantage and preference. Aside from such bare
34 

SAME ISSUE AND THE SAME SET OF FACTS AND allegations, there is nothing on record proving that
CIRCUMSTANCES, AND THE SUBSEQUENT respondent Malinis in fact demanded such 50%, or
SUSPENSION OF THE PROCEEDINGS THEREON that the holding of the separate hearings and the
VIOLATES SECTION 16, ARTICLE IV OF THE suspension of the proceedings were done in order to
CONSTITUTION AS WELL AS EXECUTIVE ORDER coerce petitioner into acceding to Malinis’ demand.
NO. 26 AND INSURANCE MEMORANDUM
CIRCULAR 1-93 MANDATING THE SPEEDY Petitioner argues that respondent Malinis did not deny
DISPOSITION OF ADMINISTRATIVE CASES. 31
her accusations and failed to answer the charges
against him, indicating therefore the truth of her
The Court finds the petition devoid of merit. The allegations. Indeed, the general rule is that failure to
35 

Ombudsman did not commit any grave abuse of deny allegations in the complaint results in admission
discretion when it found no probable cause and thereof.  Such rule, however, is not absolute and
36 

dismissed the Complaint-Affidavit against admits of exceptions. In Florentino Atillo III vs. Court
37 

respondents. of Appeals, Amancor, Inc. and Michell Lhuillier, we 38 

held that in spite of the presence of judicial

The Ombudsman resolved to dismiss the charges admissions in a party’s pleading, the trial court is still
against respondents as the latter were able to given leeway to consider other evidence
satisfactorily explain the reason for the holding of presented; or, as in the present case, the absence of
39

separate hearings, i.e., expediency, and the evidence for the petitioner to prove her claim.
Commission is allowed under its rules of procedure to
order the suspension of Adm. Case No. RD-156. The It is fundamental that upon him who alleges rests the
Ombudsman concluded: burden of proof; hence, it is incumbent upon
40 

petitioner to prove her allegations with competent

The conduct of separate hearings and issuance of the evidence. She cannot simply rely on respondent
41 

Order were all done in the regular performance of Malinis’ failure to specifically deny her allegations to
duties by the respondents Insurance Commissioner prove that there was such an illegal proposition.
and Hearing Officer respetively (sic). Moreover, they Respondents may not be indicted on mere
were done within the purview of the rules of procedure presumptions.
governing the functions of the Insurance Commission.
A review of the records shows that petitioner failed to
Finally, complainant failed to substantiate her charge prove her claim such that respondents may not be
with any concrete evidence, thus we can simply indicted for the acts complained of. As aptly found by
the Ombudsman, there was no concrete evidence Petitioner may have been fraught with attending and
presented by petitioner to substantiate her charge. 42
litigating her claims against each of the fourteen
insurers as well as the insurance adjusters,
To establish probable cause for Violation of Section individually, but inconvenience is certainly not
3[e] of R.A. 3019, the following elements must be constitutive of undue injury. 48

present:
Moreover, petitioner failed to show that the conduct of
(1) The accused is a public officer or a private person separate hearings was done by respondents through
charged in conspiracy with the former; manifest partiality, evident bad faith or gross
inexcusable negligence.
(2) The said public officer commits the prohibited acts
during the performance of his or her official duties or Records show that as early as January 1994, when
in relation to his or her public positions; petitioner first brought the matter of the delay in her
insurance claims to the Commission, respondent
(3) That he or she causes undue injury to any party, Malinis, upon the request of petitioner, exerted efforts
whether the government or a private party; to mediate between her and the insurance companies
in order to amicably settle the claims notwithstanding
the fact that it was beyond the jurisdictional amount
(4) Such undue injury is caused by giving
cognizable by the Commission under the Insurance
unwarranted benefits, advantage or preference to
Code, as amended.
such parties; and
1awphi1.nét

Paragraph 1, Section 416 of the Code provides that

(5) That the public officer has acted with manifest
the Insurance Commissioner shall have the power to
partiality, evident bad faith or gross inexcusable
adjudicate claims and complaints involving any loss,
negligence. 43

damage or liability for which an insurer may be

answerable under any kind of policy or contract of
The causing of undue injury or the giving of any insurance where the amount of any such loss,
unwarranted benefits, advantage or preference damage or liability does not exceed in any single
through manifest partiality, evident bad faith or gross claim one hundred thousand pesos. When the
inexcusable negligence constitutes the very act insurance companies made known their official
punished under the foregoing section. 44
position to deny the claims, respondent Malinis
persisted in holding meetings between the parties. It
Petitioner complains that she found it "difficult and was only after petitioner formally filed a complaint for
burdensome to prosecute her case against the Revocation and/or Suspension of Licenses with the
insurers … not to mention that she had been rendered Commission that settlement discussions were
despondent by the loss of her business due to discontinued as it may compromise the Commission’s
conflagration." Such difficulty and burden, however,
45 
impartiality. These clearly are not indicative of evident
49 

do not, per se, constitute the undue injury bad faith, manifest partiality or gross inexcusable
contemplated by law. negligence on respondents’ part. Thus, respondent
Malinis cannot be faulted for attempting to mediate
Jurisprudence has consistently interpreted the term among the parties.
"undue injury" as synonymous to "actual damage." In 46 

Llorente, Jr. vs. Sandiganbayan, we explained the

47 
Records also show that the separate hearings on the
concept of "undue injury" as an element of the offense case were held only during the early part of the
punishable under Section 3 [e] of Rep. Act No. 3019, proceedings in Adm. Case No. RD-156, particularly
to wit: on August 15, 16, 17, 1994, and September 6, 7, 8, 9,
12, 13, 14, 16, 19, 20, 21, 22, 23, 1994. During the
50 

… Undue has been defined as "more than necessary, clarificatory hearing held before the Office of the
not proper, [or] illegal;" and injury as "any wrong or Ombudsman, respondent Castro explained that the
damage done to another, either in his person, rights, conduct of separate hearings was necessary because
reputation or property[;] [that is, the] invasion of any petitioner’s claims involved several insurance
legally protected interest of another." Actual damage, companies, adjusters and peculiar issues for each of
in the context of these definitions, is akin to that in civil the companies. What petitioner conveniently omitted
51 

law. to add is that consolidated/joint hearings were in fact

held on August 25, 29, 1994, April 6, 1995, May 12,
… 1995, June 5, 1995, and July 3, 1995. This negates
52 

petitioner’s allegation that respondents were

deliberately holding separate hearings to her
prejudice. Notably, it was during the hearing of July 3, answerable under any kind of policy or contract of
1995 that the motion to dismiss the Amended insurance, or for which such insurer may be liable
Complaint was heard and argued before respondent under a contract of suretyship, or for which a reinsurer
Castro who eventually decided to order the may be sued under any contract or reinsurance it may
suspension of the proceedings. 53
have entered into, or for which a mutual benefit
association may be held liable under the membership
The fact that the Commission suspended the certificates it has issued to its members, where the
proceedings due to the pendency of Civil Case No. Q- amount of any such loss, damage or liability,
95-23135 does not constitute an indictable offense excluding interests, cost and attorney's fees, being
under Section 3 [e] of R.A. No. 3019. claimed or sued upon any kind of insurance, bond,
reinsurance contract, or membership certificate does
In Almendras Mining Corporation vs. Office of the not exceed in any single claim one hundred thousand
Insurance Commission, the Court expounded on the
54  pesos. (Emphasis supplied)
two-fold powers of the Insurance Commission under
the Insurance Code, as amended,  to wit:
55  Under its adjudicatory authority, the Insurance
Commission has the original jurisdiction to adjudicate
. . . the Office of the Insurance Commission is an and settle insurance claims and complaints where the
administrative agency vested with regulatory power as amount being claimed does not exceed in any single
well as with adjudicatory authority. Among the several claim one hundred thousand pesos, as provided in
regulatory or non-quasi-judicial duties of the Section 416 of the Code. Such original jurisdiction is
Insurance Commissioner under the Insurance Code is concurrent with that of the Metropolitan Trial Courts,
the authority to issue, or refuse issuance of, a the Municipal Trial Courts and the Municipal Circuit
Certificate of Authority to a person or entity desirous Trial Courts.
56

of engaging in insurance business in the Philippines,

and to revoke or suspend such Certificate of Authority In addition to such adjudicatory power, the
upon a finding of the existence of statutory grounds Commissioner has the regulatory authority to revoke
for such revocation or suspension. The grounds for or suspend the certificate or authority of an insurance
revocation or suspension of an insurer's Certificate of company upon finding the legal grounds for such
Authority are set out in Section 241 and in Section revocation or suspension under Sections 241 and 247
247 of the Insurance Code as amended. The general of the Insurance Code. Section 241 is quoted in the
regulatory authority of the Insurance Commissioner is early part of herein Decision. Section 247 provides:
described in Section 414 of the Insurance Code, as
amended, in the following terms: SEC. 247. If the Commissioner is of the opinion upon
examination or other evidence that any domestic or
Sec. 414. The Insurance Commissioner shall have the foreign insurance company is in an unsound
duty to see that all laws relating to insurance, condition, or that it has failed to comply with the
insurance companies and other insurance matters, provisions of law or regulations obligatory upon it, or
mutual benefit associations, and trusts for charitable that its condition or methods of business is such as to
uses are faithfully executed and to perform the duties render its proceedings hazardous to the public or to
imposed upon him by this Code, and shall, its policyholders, or that its paid-up capital stock, in
notwithstanding any existing laws to the contrary, the case of a domestic stock company, or its available
have sole and exclusive authority to regulate the cash assets, in the case of domestic mutual company,
issuance and sale of variable contracts as defined in or its security deposits, in the case of a foreign
section two hundred thirty-two and to provide for the company, is impaired or deficient, or that the margin
licensing of persons selling such contracts, and to of solvency required of such company is deficient, the
issue such reasonable rules and regulations Commissioner is authorized to suspend or revoke all
governing the same. certificates of authority granted to such insurance
company, its officers and agents, and no new
... business shall thereafter be done by such company or
for such company by its agent in the Philippines while
such suspension, revocation or disability continues or
The adjudicatory authority of the Insurance
until its authority to do business is restored by the
Commissioner is generally described in Section 416
Commission. Before restoring such authority, the
of the Insurance Code, as amended, which reads as
Commissioner shall required the company concerned
follows:
to subject to him a business plan showing the
company’s estimated receipts and disbursements, as
Sec. 416. The Commissioner shall have the power to well as the basis therefore, for the next succeeding
adjudicate claims and complaints involving any loss, three years. (As amended by P.D. No. 1455)
damage or liability for which an insurer may be
Petitioner pursued her fire insurance claims through Petitioner’s causes of action in Civil Case No. Q-95-
the regular courts when she filed Civil Case No. Q-95- 23135 are predicated on the insurers’ refusal to pay
23135 for Specific Performance with Damages with her fire insurance claims despite notice, proofs of
the RTC-Quezon City (Branch 222), her claims being losses and other supporting documents. Thus,
beyond the jurisdiction of the Commission. In petitioner prays in her complaint that the insurers be
resolving petitioner’s claims, the trial court must ordered to pay the full-insured value of the losses, as
therefore determine whether there was unreasonable embodied in their respective policies. Petitioner also
58 

denial or withholding of the claims by the insurance sought payment of interests and damages in her favor
companies. caused by the alleged delay and refusal of the
insurers to pay her claims. The principal issue then
59 

On the other hand, in Adm. Case No. RD-156 pending that must be resolved by the trial court is whether or
before the Insurance Commission, the Commissioner not petitioner is entitled to the payment of her
is called upon to determine whether there was insurance claims and damages. The matter of
unreasonable delay or withholding of the claims, as whether or not there is unreasonable delay or denial
petitioner’s action is one for the Revocation and/or of the claims is merely an incident to be resolved by
Suspension of Licenses on grounds of alleged the trial court, necessary to ascertain petitioner’s right
violations of Section 241 (b), (c), (d) and (e) of the to claim damages, as prescribed by Section 244 of
Insurance Code, as amended, on prompt investigation the Insurance Code.
and settlement of claims. The jurisdiction of the
Commission in this case is one that calls for the On the other hand, the core, if not the sole bone of
exercise of its regulatory or non-quasi-judicial duty, contention in Adm. Case No. RD-156, is the issue of
i.e., the authority to revoke or suspend an insurer’s whether or not there was unreasonable delay or
certificate of authority. Aside
57 
from the denial of the claims of petitioner, and if in the
revocation/suspension of license, the Insurance affirmative, whether or not that would justify the
Commissioner also has the discretion to impose upon suspension or revocation of the insurers’ licenses.
the erring insurance companies and its directors,
officers and agents, fines and penalties, as set out in Moreover, in Civil Case No. Q-95-23135, petitioner
Section 415, viz.: must establish her case by a preponderance of
evidence, or simply put, such evidence that is of
SEC. 415. In addition to the administrative sanction greater weight, or more convincing than that which is
provided elsewhere in this Code, the Insurance offered in opposition to it. In Adm. Case No. RD-156,
60

Commissioner is hereby authorized, at his discretion, the degree of proof required of petitioner to establish
to impose upon insurance companies, their directors her claim is substantial evidence, which has been
and/or officers and/or agents, for any willful failure or defined as that amount of relevant evidence that a
refusal to comply with, or violation of any provision of reasonable mind might accept as adequate to justify
this Code, or any order, instruction, regulation or the conclusion. 61

ruling of the Insurance Commissioner, or any

commission of irregularities, and/or conducting In addition, the procedure to be followed by the trial
business in an unsafe or unsound manner as may be court is governed by the Rules of Court, while the 62 

determined by the Insurance Commissioner, the Commission has its own set of rules and it is not 63 

following: bound by the rigidities of technical rules of

procedure. These two bodies conduct independent
64 

(a) Fines not in excess of five hundred pesos means of ascertaining the ultimate facts of their
a day; and respective cases that will serve as basis for their
respective decisions. 1a\^/phi1.net

(b) Suspension, or after due hearing, removal

of directors and/or officers and/or agents. If, for example, the trial court finds that there was no
unreasonable delay or denial of her claims, it does not
The findings of the trial court will not necessarily automatically mean that there was in fact no such
foreclose the administrative case before the unreasonable delay or denial that would justify the
Commission, or vice versa. True, the parties are the revocation or suspension of the licenses of the
same, and both actions are predicated on the same concerned insurance companies. It only means that
set of facts, and will require identical evidence. But petitioner failed to prove by preponderance of
the issues to be resolved, the quantum of evidence, evidence that she is entitled to damages. Such finding
the procedure to be followed and the reliefs to be would not restrain the Insurance Commission, in the
adjudged by these two bodies are different. exercise of its regulatory power, from making its own
finding of unreasonable delay or denial as long as it is
supported by substantial evidence.
While the possibility that these two bodies will come Lawrence L. Fernandez & Associates for private
up with conflicting resolutions on the same issue is respondent.
not far-fetched, the finding or conclusion of one would
not necessarily be binding on the other given the
difference in the issues involved, the quantum of
evidence required and the procedure to be followed. MEDIALDEA, J.:

Moreover, public interest and public policy demand Assailed in this petition is the decision of the Court of Appeals in CA-G.R.
C.V. No. 13498 entitled, "Lawrence L. Fernandez, plaintiff-appellee v.
the speedy and inexpensive disposition of Zenith Insurance Corp., defendant-appellant" which affirmed in toto the
administrative cases.65 decision of the Regional Trial Court of Cebu, Branch XX in Civil Case No.
CEB-1215 and the denial of petitioner's Motion for Reconsideration.

Hence, Adm. Case No. RD-156 may proceed

alongside Civil Case No. Q-95-23135. The antecedent facts are as follows:

The suspension of Adm. Case No. RD-156 by On January 25, 1983, private respondent Lawrence
respondents, albeit erroneous, is not sufficient indicia Fernandez insured his car for "own damage" under
of evident bad faith, manifest partiality or gross private car Policy No. 50459 with petitioner Zenith
inexcusable negligence. Respondents’ mistaken Insurance Corporation. On July 6, 1983, the car
sense of prudence and judgment, dictated the figured in an accident and suffered actual damages in
suspension of the proceedings. To hold respondents the amount of P3,640.00. After allegedly being given
responsible for such error would be nothing short of a run around by Zenith for two (2) months, Fernandez
harassment. For no one called upon to try the facts or filed a complaint with the Regional Trial Court of Cebu
interpret the law in the process of administering for sum of money and damages resulting from the
justice can be infallible in his judgment.
66
refusal of Zenith to pay the amount claimed. The
complaint was docketed as Civil Case No. CEB-1215.
Aside from actual damages and interests, Fernandez
WHEREFORE, the instant petition for review on
also prayed for moral damages in the amount of
certiorari is hereby DENIED for lack of merit.
P10,000.00, exemplary damages of P5,000.00,
However, in the interest of orderly administration of
attorney's fees of P3,000.00 and litigation expenses of
justice, the Insurance Commission is directed to
P3,000.00.
proceed with immediate dispatch in conducting the
hearings of Adm. Case No. RD-156 to determine
whether or not the licenses of the insurance On September 28, 1983, Zenith filed an answer
companies and adjusters may be revoked or alleging that it offered to pay the claim of Fernandez
suspended as prayed for by petitioner. pursuant to the terms and conditions of the contract
which, the private respondent rejected. After the
issues had been joined, the pre-trial was scheduled
No costs.
on October 17, 1983 but the same was moved to
November 4, 1983 upon petitioner's motion, allegedly
SO ORDERED. to explore ways to settle the case although at an
amount lower than private respondent's claim. On
November 14, 1983, the trial court terminated the pre-
trial. Subsequently, Fernandez presented his
Republic of the Philippines evidence. Petitioner Zenith, however, failed to present
SUPREME COURT its evidence in view of its failure to appear in court,
Manila without justifiable reason, on the day scheduled for
the purpose. The trial court issued an order on August
FIRST DIVISION 23, 1984 submitting the case for decision without
Zenith's evidence (pp. 10-11, Rollo). Petitioner filed a
petition for certiorari with the Court of Appeals
 
assailing the order of the trial court submitting the
case for decision without petitioner's evidence. The
G.R. No. 85296 May 14, 1990 petition was docketed as C.A.-G.R. No. 04644.
However, the petition was denied due course on April
ZENITH INSURANCE CORPORATION, petitioner,  29, 1986 (p. 56, Rollo).
vs.
COURT OF APPEALS and LAWRENCE On June 4, 1986, a decision was rendered by the trial
FERNANDEZ, respondents. court in favor of private respondent Fernandez. The
dispositive portion of the trial court's decision
Vicente R. Layawen for petitioner. provides:
 WHEREFORE, defendant is hereby court's order submitting the case for decision without
ordered to pay to the plaintiff: Zenith's evidence, was dismissed.

1. The amount of P3,640.00 The Motion for Reconsideration of the decision of the
representing the damage incurred plus Court of Appeals dated August 17, 1988 was denied
interest at the rate of twice the on September 29, 1988, for lack of merit. Hence, the
prevailing interest rates; instant petition was filed by Zenith on October 18,
1988 on the allegation that respondent Court of
2. The amount of P20,000.00 by way Appeals' decision and resolution ran counter to
of moral damages; applicable decisions of this Court and that they were
rendered without or in excess of jurisdiction. The
3. The amount of P20,000.00 by way issues raised by petitioners in this petition are:
of exemplary damages;
a) The legal basis of respondent Court
4. The amount of P5,000.00 as of Appeals in awarding moral
attorney's fees; damages, exemplary damages and
attomey's fees in an amount more
than that prayed for in the complaint.
5. The amount of P3,000.00 as
litigation expenses; and
b) The award of actual damages of
P3,460.00 instead of only P1,927.50
6. Costs. (p. 9, Rollo)
which was arrived at after deducting
P250.00 and P274.00 as deductible
Upon motion of Fernandez and before the expiration franchise and 20% depreciation on
of the period to appeal, the trial court, on June 20, parts as agreed upon in the contract of
1986, ordered the execution of the decision pending insurance.
appeal. The order was assailed by petitioner in a
petition for certiorariwith the Court of Appeals on
Petitioner contends that while the complaint of private
October 23, 1986 in C.A. G.R. No. 10420 but which
respondent prayed for P10,000.00 moral damages,
petition was also dismissed on December 24, 1986 (p.
the lower court awarded twice the amount, or
69, Rollo).
P20,000.00 without factual or legal basis; while
private respondent prayed for P5,000.00 exemplary
On June 10, 1986, petitioner filed a notice of appeal damages, the trial court awarded P20,000.00; and
before the trial court. The notice of appeal was while private respondent prayed for P3,000.00
granted in the same order granting private attorney's fees, the trial court awarded P5,000.00.
respondent's motion for execution pending appeal.
The appeal to respondent court assigned the following
The propriety of the award of moral damages,
errors:
exemplary damages and attorney's fees is the main
issue raised herein by petitioner.
I. The lower court erred in denying defendant
appellant to adduce evidence in its behalf.
The award of damages in case of unreasonable delay
in the payment of insurance claims is governed by the
II. The lower court erred in ordering Zenith Philippine Insurance Code, which provides:
Insurance Corporation to pay the amount of
P3,640.00 in its decision.
Sec. 244. In case of any litigation for
the enforcement of any policy or
III. The lower court erred in awarding moral contract of insurance, it shall be the
damages, attorneys fees and exemplary duty of the Commissioner or the
damages, the worst is that, the court awarded Court, as the case may be, to make a
damages more than what are prayed for in the finding as to whether the payment of
complaint. (p. 12, Rollo) the claim of the insured has been
unreasonably denied or withheld; and
On August 17, 1988, the Court of Appeals rendered in the affirmative case, the insurance
its decision affirming in toto the decision of the trial company shall be adjudged to pay
court. It also ruled that the matter of the trial court's damages which shall consist of
denial of Fernandez's right to adduce evidence is a attomey's fees and other expenses
closed matter in view of its (CA) ruling in AC-G.R. incurred by the insured person by
04644 wherein Zenith's petition questioning the trial reason of such unreasonable denial or
 withholding of payment plus interest of award of P20,000.00 as moral damages, taking into
twice the ceiling prescribed by the consideration also the fact that the actual damage on
Monetary Board of the amount of the the car was only P3,460. In the pre-trial of the case, it
claim due the insured, from the date was shown that there was no total disclaimer by
following the time prescribed in respondent. The reason for petitioner's failure to
section two hundred forty-two or in indemnify private respondent within the two-month
section two hundred forty-three, as the period was that the parties could not come to an
case may be, until the claim is fully agreement as regards the amount of the actual
satisfied; Provided, That the failure to damage on the car. The amount of P10,000.00
pay any such claim within the time prayed for by private respondent as moral damages is
prescribed in said sections shall be equitable.
considered prima facie evidence of
unreasonable delay in payment. On the other hand, exemplary or corrective damages
are imposed by way of example or correction for the
It is clear that under the Insurance Code, in case of public good (Art. 2229, New Civil Code of the
unreasonable delay in the payment of the proceeds of Philippines). In the case of Noda v. Cruz-
an insurance policy, the damages that may be Arnaldo, G.R. No. 57322, June 22,1987; 151 SCRA
awarded are: 1) attorney's fees; 2) other expenses 227, exemplary damages were not awarded as the
incurred by the insured person by reason of such insurance company had not acted in wanton,
unreasonable denial or withholding of payment; 3) oppressive or malevolent manner. The same is true in
interest at twice the ceiling prescribed by the the case at bar.
Monetary Board of the amount of the claim due the
injured; and 4) the amount of the claim. The amount of P5,000.00 awarded as attomey's fees
is justified under the circumstances of this case
As regards the award of moral and exemplary considering that there were other petitions filed and
damages, the rules under the Civil Code of the defended by private respondent in connection with
Philippines shall govern. this case.

"The purpose of moral damages is essentially As regards the actual damages incurred by private
indemnity or reparation, not punishment or correction. respondent, the amount of P3,640.00 had been
Moral damages are emphatically not intended to established before the trial court and affirmed by the
enrich a complainant at the expense of a defendant, appellate court. Respondent appellate court correctly
they are awarded only to enable the injured party to ruled that the deductions of P250.00 and P274.00 as
obtain means, diversions or amusements that will deductible franchise and 20% depreciation on parts,
serve to alleviate the moral suffering he has respectively claimed by petitioners as agreed upon in
undergone by reason of the defendant's culpable the contract, had no basis. Respondent court ruled:
action." (J. Cezar S. Sangco, Philippine Law on Torts
and Damages, Revised Edition, p. 539) (See also R Under its second assigned error, defendant-
and B Surety & Insurance Co., Inc. v. IAC, G.R. No. appellant puts forward two arguments, both of
64515, June 22, 1984; 129 SCRA 745). While it is which are entirely without merit. It is contented
true that no proof of pecuniary loss is necessary in that the amount recoverable under the
order that moral damages may be adjudicated, the insurance policy defendant-appellant issued
assessment of which is left to the discretion of the over the car of plaintiff-appellee is subject to
court according to the circumstances of each case deductible franchise, and . . . .
(Art. 2216, New Civil Code), it is equally true that in
awarding moral damages in case of breach of The policy (Exhibit G, pp. 4-9, Record), does
contract, there must be a showing that the breach was not mntion any deductible franchise, . . . (p.
wanton and deliberately injurious or the one 13, Rollo)
responsible acted fraudently or in bad faith (Perez v.
Court of Appeals, G.R. No. L-20238, January
Therefore, the award of moral damages is reduced to
30,1965; 13 SCRA 137; Solis v. Salvador, G.R. No. L-
P10,000.00 and the award of exemplary damages is
17022, August 14, 1965; 14 SCRA 887). In the instant
hereby deleted. The awards due to private respondent
case, there was a finding that private respondent was
Fernandez are as follows:
given a "run-around" for two months, which is the
basis for the award of the damages granted under the
Insurance Code for unreasonable delay in the 1) P3,640.00 as actual claim plus
payment of the claim. However, the act of petitioner of interest of twice the ceiling prescribed
delaying payment for two months cannot be by the Monetary Board computed from
considered as so wanton or malevolent to justify an the time of submission of proof of loss;
 2) P10,000.00 as moral damages; To both questions, the plaintiff answered: "none,"
though the truth was at that time, the American
3) P5,000.00 as attorney's fees; International Underwriters of the Philippines (AIU) had
already declined a similar application for insurance by
4) P3,000.00 as litigation expenses; the plaintiff in respect of the above-described
and vehicles.

5) Costs. On April 22, 1959, the defendant-appellee issued to

the plaintiff-appellant two Commercial Vehicle
Comprehensive Policies covering the above
ACCORDINGLY, the appealed decision is MODIFIED
properties. On August 30, 1959, while the said
as above stated.
policies were in force, the aforementioned vehicles
figured in an accident at Bagabag, Nueva Vizcaya,
SO ORDERED. resulting in the total loss of the tractor and partial
damage to the trailer. Accordingly, the plaintiff gave
notice of the same to the defendant company and
made demand upon the latter for the payment to him
Republic of the Philippines of P27,962.00, the total amount of damages resulting
SUPREME COURT from the accident.
Manila
On April 28, 1960, the defendant-appellant rejected
EN BANC the above claim by reason of, among others, the
claimant's alleged "concealment of a material fact,"
G.R. No. L-19613             April 30, 1966 namely: that the insured property previously been
declined insurance by another company.
ALFONSO G. LOPEZ, plaintiff-appellant, 
vs. In view of the rejection of his claim by the defendant
FILIPINAS COMPAÑIA DE SEGUROS, defendant- company, the 
appellee. plaintiff-appellant filed on May 27, 1960 with the Office
of the Insurance Commissioner a complaint against
Antonio M. Mendoza for plaintiff-appellant. the said company. On June 7, 1960, the Assistant
Josue H. Gustilo and Associates for defendant- Insurance Commissioner requested the defendant
appellee. company to give its side of the above complaint and,
thereafter, or on August 1, 1960, the said official
"transmitted to the plaintiff, thru his counsel, the 'self-
REGALA, J.:
explanatory letters' dated June 12, 1960 of the
American International Underwriters of the
This is an appeal by the plaintiff-appellant, Alfonso G. Philippines, Inc., and June 21, 1960 of the defendant,
Lopez, from an order of the Court of First Instance of which the said office had received from said parties in
Manila, dated January 25, 1962, dismissing his connection with plaintiff's complaint, with the
complaint against the defendant-appellee, Filipinas suggestion that in view of the reluctant attitude of
Compañia de Seguros. plaintiff 'towards the company's proposal for the
matter to be settled thru arbitration, and considering
Prior to April 22, 1959, the plaintiff applied with the the informative facts disclosed, in the letter of the
defendant company for the insurance of his property AIUPI, plaintiff should pursue his case to the Court
consisting of a Biederman truck tractor and a Winter which has proper competence to resolve said matter."
Weils trailer from loss or damage in the amount of
P26,000.00 and P10,000.00, respectively. In On August 16, 1961, the plaintiff-appellant informed
connection with the above application, the defendant by letter the Office of the Insurance Commissioner
company inquired of the plaintiff the following: that he was willing to submit his claim to arbitration
and, in the premises, suggested that the Assistant
5. Has any company in respect of the Insurance Commissioner be designated as the sole
insurance of any car or vehicle (a) declined, arbitrator of the same. On September 1, 1960, the
cancelled or refused to renew your insurance? Insurance Commissioner informed the plaintiff-
appellant of his willingness to act as the single
(b) increased your premium on renewal? arbitrator, provided that both parties to the dispute
manifest in writing their conformity thereto and to
abide by the arbitrator's award. The defendant-
appellee, on the other hand, informed the Insurance In 1 Moran 86 (1963 ed.), the following jurisprudence
Commissioner on September 22, 1960 that it could is expressed:
not consent to the above proposal since "the claim of
the plaintiff cannot be resolved by arbitration, as Action is the act by which one sues another in
recourse to arbitration referred to in the policy a court of justice for the enforcement or
contract, envisioned only differences or disputes, 'with protection of a right, or the prevention or
respect to the amount of the company's liability,' and redress of a wrong. Special proceeding is the
not to cases where the company does not admit its act by which one seeks to establish the status
liability to the insured." With this rejection, the plaintiff- or right of a party, or a particular fact. Hence,
appellant filed his complaint with the Court of First an action is distinguished from special
Instance of Manila on September 19, 1961. proceeding in that the former is a formal
demand of a right by one against another,
Against the above complaint, the defendant-appellee while the latter is but a petition or a
filed on September 29, 1961 a motion to dismiss on declaration of a status, right or fact.
the ground of prescription. The latter argued that the (Emphasis supplied.)
plaintiff's claim had already prescribed since it was
not filed within twelve months from its rejection by the The above distinction was laid down in connection
insurance company as stipulated under paragraph 9 with the definition of "action" in Rule 2, Section 1 of
of the General Conditions of Commercial Vehicle the Rules of Court that:
Comprehensive Policy Nos. 5598 and 5599, to wit:
Section 1. Action defined.—Action means an
If a claim be made and rejected and an action ordinary suit in a Court of Justice by which
or suit be not commenced within twelve one party prosecutes another for the
months after such rejection or (in case of an enforcement or protection of a right, or the
arbitration taking place as provided herein) prevention or redress of a wrong. (Emphasis
within twelve months after the arbitrator, supplied.)
arbitrators, or umpire shall have made their
award then the claim shall for all purposes be Also, in 1 Am. Jur. 407, as cited in Francisco, Civil
deemed to have been abandoned and shall Procedure, p. 91, a suit is defined as:
not thereafter be recovered hereunder.
Suit is the prosecution or pursuit of some
On January 25, 1962, the court a quo sustained the claim or demand in a court of justice or any
above motion and dismissed the complaint. Thus, the proceeding in a court of justice in which a
instant appeal. plaintiff pursues his remedy to recover a right
or claim. (Emphasis supplied.)
The principal issue raised in this appeal is simple:
Was the complaint filed by the plaintiff-appellant with Upon the authorities, therefore, it is settled that the
the Office of the Insurance Commissioner on May 27, terms "action" and "suit" are synonymous. Moreover,
1960 a commencement of an "action or suit" within it is clear that the determinative or operative fact
the meaning and intent of general condition quoted which converts a claim into an "action or suit" is the
above?, If it was, then the plaintiff's complaint has not filing of the same with a "court or justice." Filed
yet prescribed since the complaint filed with the said elsewhere, as with some other body or office not a
office was made on May 27, 1960 or just about a court of justice, the claim may not properly be
month after his claim was rejected by the defendant- categorized under either term.
appellee on April 28 1960. On the other hand, if the
above-quoted condition refers alone to an "action or
Apart from the foregoing, however, there is yet one
suit" filed with a court of justice, as the Order
other reason why the appellant's recourse to the
appealed from urges and as the herein appellee
Office of the Insurance Commissioner could not have
maintains, then, indeed, must the finding or
been an "action or suit" which could have halted the
prescription in this incident be upheld. For, while the
running of the prescriptive period stipulated in the
plaintiff's claim was rejected on April 28, 1960 by the
insurance policies involved. An "action or suit" is
insurance company, the "action or suit" thereon with a
essentially "for the enforcement or protection of a
court of justice was filed some 17 months later,
right, or the prevention or redress of a wrong." (Rule
September 19, 1961.
2, Sec. 1, Rules of Court). There is nothing in the
Insurance Law, Act No. 2427, as amended, nor in any
We find for the appellee. of its allied Legislations, which empowers the
Insurance Commissioner to adjudicate on disputes
relating to an insurance company's liability to an
insured under a policy issued by the former to the policy   procured from private respondent by ECDC for
2

latter. The validity of an insured's claim under a its overseas workers. The insured risk was for
specific policy, its amount, and all such other matters "(b)odily injury caused by violent accidental external
as might involve the interpretation and construction of and visible means which injury (would) solely and
the insurance policy, are issues which only a regular independently of any other cause"   result in death or
3

court of justice may resolve and settle. Consequently, disability.

the complaint filed by the appellant herein with the
Office of the Insurance Commission could not have On 22 May 1982, within the life of the policy, Gabriel
been an "action or suit." died in Iraq. A year later, or on 12 July 1983, ECDC
reported Gabriel's death to private respondent by
The other assignments of error in the appellant's brief telephone.   Among
4
the documents thereafter
spring from or are consequences of the latter's view submitted to private respondent were a copy of the
that the claim be filed with the Office of the Insurance death certificate   issued by the Ministry of Health of
5

Commissioner was an "action or suit" within the the Republic of Iraq — which stated
contemplation of paragraph 9 of the general condition
earlier quoted. With our ruling above, therefore, the REASON OF DEATH: UNDER
necessity to pass on them becomes inconsequential. EXAMINATION NOW — NOT YET
KNOWN   —6

Wherefore, the order appealed from is hereby

affirmed, with costs. and an autopsy report   of the National Bureau
7

of Investigation ("NBI") to the effect that "(d)ue

Republic of the Philippines to advanced state of postmortem
SUPREME COURT decomposition, cause of death (could) not be
Manila determined."   Private respondent referred the
8

insurance claim to Mission Adjustment

FIRST DIVISION Service, Inc.

  Following a series of communications between

petitioner and private respondent, the latter, on 22
G.R. No. 103883 November 14, 1996 September 1983, ultimately denied the claim of ECDC
on the ground of prescription.   Petitioner went to the
9

Regional Trial Court of Manila. In her complaint

JACQUELINE JIMENEZ VDA. DE
against ECDC and private respondent, she averred
GABRIEL, petitioner, 
that her husband died of electrocution while in the
vs.
performance of his work and prayed for the recovery
HON. COURT OF APPEALS and FORTUNE
of P100,000.00 for insurance indemnification and of
INSURANCE & SURETY COMPANY,
various other sums by way of actual, moral, and
INC., respondents.
exemplary damages, plus attorney's fees and costs of
suit.
 
Private respondent filed its answer, which was not
VITUG, J.: verified, admitting the genuineness and due execution
of the insurance policy; it alleged, however, that since
The petition for review on certiorari in this case seeks both the death certificate issued by the Iraqi Ministry
the reversal of the decision   of the Court of Appeals
1
of Health and the autopsy report of the NBI failed to
setting aside the judgment of the Regional Trial Court disclose the cause of Gabriel's death, it denied liability
of Manila, Branch 55, which has ordered private under the policy. In addition, private respondent
respondent Fortune Insurance & Surety Company, raised the defense of "prescription," invoking Section
Inc., to pay petitioner Jacqueline Jimenez vda. de 384   of the Insurance Code. Later, private
10

Gabriel, the surviving spouse and beneficiary in an respondent filed an amended answer, still unverified,
accident (group) insurance of her deceased husband, reiterating its original defenses but, this time,
the amount of P100,000.00, plus legal interest. additionally putting up a counterclaim and a
crossclaim.
Marcelino Gabriel, the insured, was employed by
Emerald Construction & Development Corporation The trial court dismissed the case against ECDC for
("ECDC") at its construction project in Iraq. He was the failure of petitioner to take steps to cause the
covered by a personal accident insurance in the service of the fourth alias summons on ECDC. The
amount of P100,000.00 under a group dismissal was without prejudice.
The case proceeded against private respondent from denial of the claim, otherwise, the
alone. On 28 May 1987, the trial court rendered its claimant's right of action shall prescribe.
decision   in favor (partly) of petitioner's claim. In
11

arriving at its conclusion, the trial court held that The notice of death was given to private
private respondent was deemed to have waived the respondent, concededly, more than a year
defense, i.e., that the cause of Gabriel's death was after the death of petitioner's husband. Private
not covered by the policy, when the latter failed to respondent, in invoking prescription, was not
impugn by evidence petitioner's averment on the referring to the one-year period from the
matter. With regard to the defense of prescription, the denial of the claim within which to file an
court considered the complaint to have been timely action against an insurer but obviously to the
filed or within one (1) year from private respondent's written notice of claim that had to be
denial of the claim. submitted within six months from the time of
the accident.
Petitioner and private respondent both appealed to
the Court of Appeals. Petitioner contended that the Petitioner argues that private respondent must be
lower court should have awarded all the claims she deemed to have waived its right to controvert the
had asked for. Private respondent asserted, on its claim, that is, to show that the cause of death is an
part, that the lower court erred in ruling (a) that the excepted peril, by failing to have its answers (to the
insurer had waived the defense that Gabriel's death Request for Admission sent by petitioner) duly
was not caused by the insured peril ("violent verified. It is true that a matter of which a written
accidental external and visible means") specified in request for admission is made shall be deemed
the policy and (b) that the cause of action had not impliedly admitted "unless, within a period designated
prescribed. in the request, which shall not be less than ten (10)
days after service thereof, or within such further time
The Court of Appeals, on 18 September 1991, as the court may allow on motion and notice, the party
reversed the decision of the lower court. The to whom the request is directed serves upon the party
appellate court held that petitioner had failed to requesting the admission a sworn statement either
substantiate her allegation that her husband's death denying specifically the matters of which an admission
was caused by a risk insured against. The appellate is requested or setting forth in detail the reasons why
court observed that the only evidence presented by he cannot truthfully either admit or deny those
petitioner, in her attempt to show the circumstances matters;"   however, the verification, like in most
14

that led to the death of the insured, were her own cases required by the rules of procedure, is a formal,
affidavit and a letter allegedly written by a co-worker not jurisdictional, requirement, and mainly intended to
of the deceased in Iraq which, unfortunately for her, secure an assurance that matters which are alleged
were held to be both are done in good faith or are true and correct and not
hearsay. 12
of mere speculation. When circumstances warrant,
the court may simply order the correction of unverified
The motion for reconsideration was denied.  13 pleadings or act on it and waive strict compliance with
the rules in order that the ends of justice may thereby
Petitioner's recourse to this Court must also fail. be served.   In the case of answers to written
15

requests for admission particularly, the court can

allow the party making the admission, whether made
On the issue of "prescription," private respondent
expressly or deemed to have been made impliedly,
correctly invoked Section 384 of the Insurance
"to withdraw or amend it upon such terms as may be
Code; viz:
just." 
16

Sec. 384. Any person having any claim upon

The appellate court acted neither erroneously nor with
the policy issued pursuant to this chapter
grave abuse of discretion when it seconded the
shall, without any unnecessary delay, present
court a quoand ruled:
to the insurance company concerned a written
notice of claim setting forth the nature, extent
and duration of the injuries sustained as As to the allegation of the plaintiff-appellant that the
certified by a duly licensed physician. Notice matters requested by her to be admitted by the
of claim must be filed within six months from defendant-appellant under the Request for Admission
date of the accident, otherwise, the claim shall were already deemed admitted by the latter for its
be deemed waived. Action or suit for recovery failure to answer it under oath, has already been
of damage due to loss or injury must be properly laid to rest when the lower court in its Order
brought, in proper cases, with the of May 28, 1987 correctly ruled:
Commissioner or the Courts within one year
 At the outset, it must be stressed that the In like manner, the letter allegedly written by
defendant indeed filed a written answer to the the deceased's co-worker which was never
request for admission, sans verification. The identified to in court by the supposed author,
case of Motor Service Co., Inc. vs. Yellow suffers from the same defect as the affidavit of
Taxicab Co., Inc., et al. may not therefore be the plaintiff-appellant. 
20

controlling, or actually opposite. In said case,

there was an absolute failure on the part of Not one of the other documents submitted, to
the defendant to answer the request for wit, the POEA decision, dated 06 June
admission, and thus the court was justified in 1984,   the death certificate issued by the
21

rendering a summary judgment. Here, Ministry of Health of Iraq and the NBI autopsy
however, as clearly intimated elsewhere report,   could give any probative value to
22

above, the defendant answered in writing petitioner's claim. The POEA decision did not
practically every question posed in the request make any categorical holding on the specific
for admission. The Court believes, under the cause of Gabriel's death. Neither did the death
peculiar circumstance, that the more certificate issued by the health authorities in
controlling jurisprudence on the mater would Iraq nor the NBI autopsy report provide any
be those cited by the defendant in its clue on the cause of death. All that appeared
memorandum, particularly the case of Quimpo to be clear was the fact of Gabriel's demise on
vs. de la Victoria, 46 SCRA 139. 22 May 1982 in Iraq.

Prescinding from the foregoing, there is Evidence, in fine, is utterly wanting to establish that
absolutely no basis in fact and in law for the the insured suffered from an accidental death, the risk
lower court to hold that the appellant covered by the policy. In an accident insurance, the
insurance company was deemed to have insured's beneficiary has the burden of proof in
waived the defense, that the death of plaintiff- demonstrating that the cause of death is due to the
appellant's husband was not caused by violent covered peril. Once that fact is established, the
accidental external and visible means' as burden then shifts to the insurer to show any excepted
contemplated in the insurance policy. The peril that may have been stipulated by the parties. An
Death Certificate (Exh. 9) and the Autopsy "accident insurance" is not thus to be likened to an
Report (Exh. 10), more than controverted the ordinary life insurance where the insured's death,
allegation of the plaintiff-appellant as to the regardless of the cause thereof, would normally be
cause of death of her husband.  17
compensable. The latter is akin in property insurance
to an "all risk" coverage where the insured, on the
The insurance policy expressly provided that to be aspect of burden of proof, has merely to show the
compensable, the injury or death should be caused by condition of the property insured when the policy
"violent accidental external and visible means." In attaches and the fact of loss or damage during the
attempting to prove the cause of her husband's death, period of the policy and where, thereafter, the burden
all that petitioner could submit were a letter sent to her would be on the insurer to show any "excluded peril."
by her husband's co-worker, stating that Gabriel died When, however, the insured risk is specified, like in
when he tried to haul water out of a tank while its the case before us, it lies with the claimant of the
submerged motor was still functioning,   and 18
insurance proceeds to initially prove that the loss is
petitioner's sinumpaang caused by the covered peril.
salaysay   which merely confirmed the receipt and
19

stated contents of the letter. Said the appellate court While petitioner did fail in substantiating her allegation
in this regard: that the death of her husband was due to an accident,
considering, however, the uncertainty on the real
. . . . It must be noted that the only evidence cause of death, private respondent might find its way
presented by her to prove the circumstances clear into still taking a second look on the matter and
surrounding her husband's death were her perhaps help ease the load of petitioner's loss.
purported affidavit and the letter allegedly
written by the deceased co-worker in Iraq. The WHEREFORE, the decision appealed from is
said affidavit however suffers from procedural AFFIRMED. No costs.
infirmity as it was not even testified to or
identified by the affiant (plaintiff-appellant) SO ORDERED.
herself. This self-serving affidavit therefore is
a mere hearsay under the rules, . . . .

xxx xxx xxx