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Gallardo V.

Morales (1960)
CFI: Hermenegilda S. Morales to pay P7,000 to a creditor Francisca
writ of execution was issued and delivered to the Sheriff who garnished
and levied execution on the sum of P7,000 out of the P30,000 due from
the Capital Insurance & Surety Co. Inc., to Morales as beneficiary whose
husband Luis Morales died by assassination.
Morales asked the sheriff to quash and lift said garnishment or levy on
execution invoking Rule 39, section 12, subdivision (k) of the Rules of
Court but it was denied.
All moneys, benefits, privileges, or annuities accruing or in any manner
growing out of any life insurance, if the annual premiums paid do not
exceed five hundred pesos, and if they exceed that sum a like exemption
shall exist which shall bear the same proportion to the moneys, benefits,
privileges, and annuities so accruing or growing out of such insurance that
said five hundred pesos bears to the whole annual premiums paid.
Morales appealed maintaining that it was a life insurance for it insured her
husband for injuries and/or death as a result of murder or assault or
attempt thereat
ISSUE: W/N the insurance is a life insurance and not an accident insurance
HELD: NO. order appealed from is reversed, and the garnishment in dispute
hereby set aside and quashed

the annual premium was for P15

If it were an ordinary life insurance policy, taking into account that the
insured, Luis G. Morales, was 38 years of age and the amount of the
policy was for P50,000.00 the annual premium would have been around
the period for the policy was stipulated for one year, and considerations
as to age, health, occupation and other personal circumstances were not
taken into account in an accident insurance policy
Annex "1" of the opposition, shows that the Capital Insurance and Surety
Company Inc. is a non-life insurance company and that the only authority
granted to it to transact business covers fire, marine, surety, fidelity,
accident, motor car, and miscellaneous insurance, except life insurance
Accident vs Life Insurance Policy
accident policy - merely insures the person from injury and or death
resulting from murder, assault, or an attempt thereat
Accident insurance
indemnity or casualty contract

life insurance policy - what is insured is the life of the subject for a
definite number of years
life insurance
investment contract
contract by which the insurer, for a stipulated sum, engages to pay a
certain amount of money if another dies within the time limited by the
contract for insurance for one year in consideration of an advanced
premium, with the right of assured to continue it from year to year upon
payment of a premium as stipulated
includes accident insurance, since life is insured under either contract
includes all policies of insurance in which payment of insurance money is
contingent upon loss of life
"any life insurance"
applies to ordinary life insurance contracts, as well as to those which,
although intended primarily to indemnify for risks arising from accident,
likewise, insure against loss of life due, either to accidental causes, or to
the willful and criminal act of another, which, as such, is not strictly
accidental in nature
statutes of this nature seek to enable the head of the family to secure his
widow and children from becoming a burden upon the community and,
accordingly, should merit a liberal interpretation

Calanoc vs. CA (98 PHIL 79)

Facts: Basilio was a watchman of the Manila Auto Supply located at the corner of
Avenida Rizal and Zurbaran. He secured a life insurance policy from the
Philippine American Life Insurance Company in the amount of P2,000 to which was
attached asupplementary contract covering death by accident. On January 25, 1951, he
died of a gunshot wound on the occasion of a robbery committed in the house of Atty.
Ojeda at the corner of Oroquieta and Zurbaran streets. Calanoc, the widow, was paid
the sum of P2,000, face value of the policy, but when she demanded the payment of the
additional sum of P2,000 representing the value of the supplemental policy, the
company refused alleging, as main defense, that the deceased died because he was
murdered by a person who took part in the commission of the robbery and while making
an arrest as an officer of the law which contingencies were expressly excluded in the
contract and have the effect of exempting the company from liability.
It is contended in behalf of the company that Basilio was killed which "making an arrest
as an officer of the law" or as a result of an "assault or murder" committed in the place
and therefore his death was caused by one of the risks excluded by
the supplementarycontract which exempts the company from liability. This contention
was upheld by the Court of Appeals. Hence, this petition.

Issue: Whether or not the death of the victim comes within the purview of the exception
clause of the supplementary policy and, hence, exempts the company from liability.
Held: NO. Basilio was a watchman of the Manila Auto Supply which was a block away
from the house of Atty. Ojeda where something suspicious was happening which
caused the latter to ask for help. While at first he declined the invitation of Atty. Ojeda to
go with him to his residence to inquire into what was going on because he was not a
regular policeman, he later agreed to come along when prompted by the traffic
policeman, and upon approaching the gate of the residence he was shot and died. The
circumstance that he was a mere watchman and had no duty to heed the call of Atty.
Ojeda should not be taken as a capricious desire on his part to expose his life to danger
considering the fact that the place he was in duty-bound to guard was only a block
away. In volunteering to extend help under the situation, he might have thought, rightly
or wrongly, that to know the truth was in the interest of his employer it being a matter
that affects the security of the neighborhood. No doubt there was some risk coming to
him in pursuing that errand, but that risk always existed it being inherent in the position
he was holding. He cannot therefore be blamed solely for doing what he believed was in
keeping with his duty as a watchman and as a citizen. And he cannot be considered as
making an arrest as an officer of the law, as contended, simply because he went with
the traffic policeman, for certainly he did not go there for that purpose nor was he asked
to do so by the policeman.
Much less can it be pretended that Basilio died in the course of an assault or murder
considering the very nature of these crimes. In the first place, there is no proof that the
death of Basilio is the result of either crime for the record is barren of any circumstance
showing how the fatal shot was fired. Perhaps this may be clarified in the criminal case
now pending in court as regards the incident but before that is done anything that might
be said on the point would be a mere conjecture. Nor can it be said that the killing was
intentional for there is the possibility that the malefactor had fired the shot merely to
scare away the people around for his own protection and not necessarily to kill or hit the
victim. In any event, while the act may not exempt the triggerman from liability for the
damage done, the fact remains that the happening was a pure accident on the part of
the victim. The victim could have been either the policeman or Atty. Ojeda for it cannot
be pretended that the malefactor aimed at the deceased precisely because he wanted
to take his life.
Biagtan vs. The Insular Life Assurance Company, LTD|
Makalintal, J.

March 29, 1972|

Appeal from CFIs decision

- Juan Biagtan was insured with Insular for P5k and a supplementary contract Accidental Death Benefit
clause for another P5k if "the death of the Insured resulted directly from bodily injury effected solely through
external and violent means sustained in an accident . . . and independently of all other causes." The clause,
however, expressly provided that it would not apply where death resulted from an injury "intentionally
inflicted by a third party."
- One night, a band of robbers entered their house. Juan went out of his room and he was met with 9 knife
stabs. He died. The robbers were convicted of robbery with homicide.
- The family was claiming the additional P5k from Insular under the Accidental Death Benefit clause.
Insular refused on the ground that the death resulted from injuries intentionally inflicted by 3rd parties and
was therefore not covered.
- Biagtans filed against Insular. CFI ruled in favor of Biagtans.
WON the injuries were intentionally inflicted by a third party? Yes

- Whether the robbers had the intent to kill or merely to scare the victim or to ward off
any defense he might offer, it cannot be denied that the act itself of inflicting the injuries
was intentional.
- The exception in the accidental benefit clause invoked by the appellant does not
speak of the purpose whether homicidal or not of a third party in causing the
injuries, but only of the fact that such injuries have been "intentionally" inflicted this
obviously to distinguish them from injuries which, although received at the hands of a
third party, are purely accidental.
- Examples of unintentional:
>> A gun which discharges while being cleaned and kills a bystander;
>> a hunter who shoots at his prey and hits a person instead;
>> an athlete in a competitive game involving physical effort who collides with an
opponent and fatally injures him as a result.

- In Calanoc vs. CA: Where a shot was fired and it turned out afterwards that the
watchman was hit in the abdomen, the wound causing his death, the Court held that it
could not be said that the killing was intentional for there was the possibility that the
malefactor had fired the shot to scare the people around for his own protection and not
necessarily to kill or hit the victim. A similar possibility is clearly ruled out by the facts in
this case. For while a single shot fired from a distance, and by a person who was not
even seen aiming at the victim, could indeed have been fired without intent to kill or
injure, nine wounds inflicted with bladed weapons at close range cannot
conceivably be considered as innocent insofar as such intent is concerned.
- In Hucthcraft's Ex'r vs. Travelers' Ins. Co. (US case): where the insured was waylaid
and assassinated for the purpose of robbery, the court rendered judgment for the
insurance company and held that while the assassination of the insured was as to him
an unforeseen event and therefore accidental, "the clause of the proviso that excludes
the (insurer's) liability, in case death or injury is intentionally inflicted by any other
person, applies to this case."
Chris, a boxer, is a holder of an accident insurance policy. In a boxing match, he died after being
knocked out by the opponent. Can his father who is a beneficiary under said insurance policy
successfully claim indemnity from the insurance company?
Yes. Clearly, the proximate cause of death was the boxing contest. Death sustained in a
boxing contest is an accident. (De la Cruz v. Capital Insurance & Surety Co., G.R. No.
L-21574, June 30, 1966)

Eduardo de la Cruz, employed as a mucker in the Itogon-Suyoc Mines,

Inc. in Baguio, was the holder of an accident insurance policy "against
death or disability caused by accidental means"
January 1, 1957: For the celebration of the New Year, the Itogon-Suyoc
Mines, Inc. sponsored a boxing contest for general entertainment wherein
Eduardo, a non-professional boxer participated
In the course of his bout with another non-professional boxer of the same
height, weight, and size, Eduardo slipped and was hit by his opponent on
the left part of the back of the head, causing Eduardo to fall, with his head
hittingthe rope of the ring
He was brought to the Baguio General Hospital the following day. He died
due to hemorrhage, intracranial.

Simon de la Cruz, the father of the insured and who was named
beneficiary under the policy, thereupon filed a claim with the
insurance company
The Capital Insurance and Surety co., inc denied stating that the death
caused by his participation in a boxing contest was not accidental
RTC: favored Simon
ISSUE: W/N the cause of death was accident


Eduardo slipped, which was unintentional

The terms "accident" and "accidental"
as used in insurance contracts, have not acquired any technical
meaning and are construed by the courts in their ordinary and common
happen by chance or fortuitously, without intention and design, and which
is unexpected, unusual, and unforeseen
event that takes place without one's foresight or expectation
event that proceeds from an unknown cause, or is an unusual effect of a
known cause and, therefore, not expected
where the death or injury is not the natural or probable result of the
insured's voluntary act, or if something unforeseen occurs in the doing of
the act which produces the injury, the resulting death is within the
protection of policies insuring against death or injury from accident
while the participation of the insured in the boxing contest is voluntary,
the injury was sustained when he slid, giving occasion to the infliction by
his opponent of the blow that threw him to the ropes of the ring is not
The fact that boxing is attended with some risks of external injuries does
not make any injuries received in the course of the game not accidental
In boxing as in other equally physically rigorous sports, such as basketball
or baseball, death is not ordinarily anticipated to result. If, therefore, it
ever does, the injury or death can only be accidental or produced by some
unforeseen happening or event as what occurred in this case
Furthermore, the policy involved herein specifically excluded from its
(e) Death or disablement consequent upon the Insured engaging in
football, hunting, pigsticking, steeplechasing, polo-playing, racing of any
kind,mountaineering, or motorcycling.
Death or disablement resulting from engagement in boxing contests was
not declared outside of the protection of the insurance contract

Sun Insurance Office, Ltd. v. CA and Emilio Tan

G.R. No. 89741 March 13, 1991
Paras, J.
Emilio Tan took from Sun Insurance Office a P300,000.00 property
insurance policy to cover his interest in the electrical supply store of his
brother. Four days after the issuance of the policy, the building was burned
including the insured store. On August 20, 1983, Tan filed his claim for fire
loss with Sun Insurance Office, but on February 29, 1984, Sun Insurance
Office wrote Tan denying the latters claim. On April 3, 1984, Tan wrote Sun
Insurance Office, seeking reconsideration of the denial of his claim. Sun
Insurance Office answered the letter, advising Tans counsel that the
Insurers denial of Tans claim remained unchanged.
(1) WON the filing of a motion for reconsideration interrupts the 12
months prescriptive period to contest the denial of the insurance
claim; and
(2) WON the rejection of the claim shall be deemed final only of it
contains words to the effect that the denial is final;
(1) No. In this case, Condition 27 of the Insurance Policy of the parties
27. Action or suit clause - If a claim be made and rejected
and an action or suit be not commenced either in the
Insurance Commission or in any court of competent
jurisdiction within twelve (12) months from receipt of
notice of such rejection, or in case of arbitration taking
place as provided herein, within twelve (12) months after
due notice of the award made by the arbitrator or
arbitrators or umpire, then the claim shall for all purposes
be deemed to have been abandoned and shall not
thereafter be recoverable hereunder.
As the terms are very clear and free from any doubt or ambiguity
whatsoever, it must be taken and understood in its plain, ordinary and
popular sense.

Tan, in his letter addressed to Sun Insurance Office dated April 3,

1984, admitted that he received a copy of the letter of rejection on April 2,
1984. Thus, the 12-month prescriptive period started to run from the said
date of April 2, 1984, for such is the plain meaning and intention of Section
27 of the insurance policy.
The condition contained in an insurance policy that claims must be
presented within one year after rejection is not merely a procedural
requirement but an important matter essential to a prompt settlement of
claims against insurance companies as it demands that insurance suits be
brought by the insured while the evidence as to the origin and cause of
destruction have not yet disappeared.
It is apparent that Section 27 of the insurance policy was stipulated
pursuant to Section 63 of the Insurance Code, which states that:
Sec. 63. A condition, stipulation or agreement in any
policy of insurance, limiting the time for commencing an
action thereunder to a period of less than one year from
the time when the cause of action accrues, is void.
It also begs to ask, when does the cause of action accrue? The
insureds cause of action or his right to file a claim either in the Insurance
Commission or in a court of competent jurisdiction commences from the
time of the denial of his claim by the Insurer, either expressly or impliedly.
But the rejection referred to should be construed as the rejection in the first
instance (i.e. at the first occasion or for the first time), not rejection
conveyed in a resolution of a petition for reconsideration. Thus, to allow the
filing of a motion for reconsideration to suspend the running of the
prescriptive period of twelve months, a whole new body of rules on the
matter should be promulgated so as to avoid any conflict that may be
brought by it, such as:
a. whether the mere filing of a plea for reconsideration of a denial
arguments/affidavits/material evidence;
b. how many petitions for reconsideration should be permitted?
(2) No. The Eagle Star case cited by Tan to defend his theory that the
rejection of the claim shall be deemed final only of it contains words to the
effect that the denial is final is inapplicable in the instant case. Final
rejection or denial cannot be taken to mean the rejection of a petition for
reconsideration. The Insurance policy in the Eagle Star case provides that
the insured should file his claim, first, with the carrier and then with the

insurer. The final rejection being referred to in said case is the rejection by
the insurance company.

56 PHIL 147 (1931)

> El Oriente in order to protect itself against the loss that it might suffer by reason of the
death of its manager, A. Velhagen, who had had more than thirty-five (35) years of
experience in the manufacture of cigars in the Philippines, procured from the
Manufacturers Life Insurance Co., of Toronto, Canada, thru its local agent E. E. Elser,
an insurance policy on the life of the said A. Velhagen for the sum of $50,000, United
States currency designating itself as the beneficiary.
> El Oriente paid for the premiums due thereon and charged as expenses of its
business all the said premiums and deducted the same from its gross incomes as
reported in its annual income tax returns, which deductions were allowed upon a
showing that such premiums were legitimate expenses of its business.
> Upon the death of A. Velhagen in 1929, the El Oriente received all the proceeds of
the said life insurance policy, together with the interests and the dividends accruing
thereon, aggregating P104,957.88
> CIR assessed El Oriente for deficiency taxes because El Oriente did not include as
income the proceeds received from the insurance.
Whether or not the proceeds of insurance taken by a corporation on the life of an
important official to indemnify it against loss in case of his death, are taxable as income
under the Philippine Income Tax Law
In Chapter I of the Tax Code, is to be found section 4 which provides that, "The
following incomes shall be exempt from the provisions of this law: (a) The proceeds of
life insurance policies paid to beneficiaries upon the death of the insured . . ." Section
10, as amended, in Chapter II On Corporations, provides that, "There shall be levied,
assessed, collected, and paid annually upon the total net income received in the
preceding calendar year from all sources by every corporation . . .a tax of three per
centum upon such income . . ." Section 11 in the same chapter, provides the
exemptions under the law, but neither here nor in any other section is reference made
to the provisions of section 4 in Chapter I.

Under the view we take of the case, it is sufficient for our purposes to direct attention to
the anomalous and vague condition of the law. It is certain that the proceeds of life
insurance policies paid to individual beneficiaries upon the death of the insured are
exempt. It is not so certain that the proceeds of life insurance policies paid to corporate
beneficiaries upon the death of the insured are likewise exempt. But at least, it may be
said that the law is indefinite in phraseology and does not permit us unequivocally to
hold that the proceeds of life insurance policies received by corporations constitute
income which is taxable
It will be recalled that El Oriente, took out the insurance on the life of its manager, who
had had more than thirty-five years' experience in the manufacture of cigars in the
Philippines, to protect itself against the loss it might suffer by reason of the death of its
manager. We do not believe that this fact signifies that when the plaintiff received
P104,957.88 from the insurance on the life of its manager, it thereby realized a net profit
in this amount. It is true that the Income Tax Law, in exempting individual beneficiaries,
speaks of the proceeds of life insurance policies as income, but this is a very slight
indication of legislative intention. In reality, what the plaintiff received was in the nature
of an indemnity for the loss which it actually suffered because of the death of its