G.R. No.

154514 28 July 2005

White Gold Marine Services Inc. v Pioneer Insurance and Surety Corporation and the Steamship
Mutual Underwriting Association
FACTS:
White Gold Marine Services, Inc. (White Gold) procured a protection and indemnity coverage for its vessels
from The Steamship Mutual Underwriting Association (Steamship Mutual) through Pioneer Insurance and
Surety Corporation (Pioneer). Subsequently, White Gold was issued a Certificate of Entry and Acceptance.
Pioneer also issued receipts evidencing payments for the coverage. When White Gold failed to fully pay its
accounts, Steamship Mutual refused to renew the coverage.
Steamship Mutual thereafter filed a case against White Gold for collection of sum of money to recover the
latter’s unpaid balance. White Gold on the other hand, filed a complaint before the Insurance Commission
against Steamship Mutual for failing to secure a license to engage in the business of insurance and Pioneer,
for not obtaining another license as insurance agent/or a broker for Steamship Mutual. The Insurance
Commission dismissed the complaint. The CA affirmed the commission’s decision, hence, this petition.
ISSUE:
1. Whether Steamship Mutual, a P&I Club, is engaged in the insurance business in the Philippines.
2. Whether Pioneer need a license as an insurance agent/broker for Steamship Mutual.
RULING:
1. Yes, Steamship Mutual as a P&I Club is a mutual insurance association engaged in the marine
insurance business.
Section 2 (2) of the Insurance Code enumerates what constitutes doing an insurance business. These
are:
a. making or proposing to make, as insurer, any insurance contract;
b. making, or proposing to make, as surety, any contract of suretyship as a vocation and not as
merely incidental to any other legitimate business or activity of the surety;
c. doing any kind of business, including a reinsurance business, specifically recognized as
constituting the doing of an insurance business within the meaning of the Insurance Code;
d. doing or proposing to do any business in substance equivalent to any of the foregoing in a manner
designed to evade the provisions of this Code
Thus, Steamship Mutual, to continue doing business in the Philippines, must secure a license from
the Insurance Commission.
2. Yes, Pioneer needs a separate license to act as insurance agent for Steamship Mutual. Section 299
of the Insurance Code clearly states:
…No person shall act as an insurance agent or as an insurance broker in the solicitation or
procurement of applications for insurance, or receive for services in obtaining insurance, any
commission or other compensation from any insurance company doing business in the Philippines,
or any agent thereof, without first procuring a license to act from the Commissioner, w/c must be
renewed annually on the first day of January, or within six months thereafter…
G.R. No. 76452 26 July 1994
Philippine American Life Insurance Company vs Hon. Armando Ansaldo, Insurance Commissioner
FACTS:
A letter-complaint was filed by Ramon M. Paterno, Jr. dated April 17, 1986 to Commissioner Armando
Ansaldo alleging certain problems encountered by agents, supervisors, managers and public consumers of
the Philippine American Life Insurance Company (Philamlife) as a result of its certain practices.
On 23 April 1986, Commissioner Ansaldo, through a letter, requested Rodrigo De los Reyes, Philamlife’s
President, to comment on the complaint.
RULING:

G.R. L-2294 25 May 1951

Filipinas Cia de Seguros v Christern Huenefield, & Co

FACTS:
On 01 October 1941, Christern Huenefield, & Co., Inc obtained from Filipinas Cia de Seguros, fire policy No.
29333 in the sum of P100,000, covering merchandise contained in a building located at No. 711 Roman St.,
Binondo Manila. On February 27, 1942, or during the Japanese military occupation, the building and insured
merchandise were burned. The total loss suffered by Christern was fixed at P92,650. Filipinas refused to pay
the claim on the ground that the in favor of Christern had ceased to be in force on the date the United States
declared war against Germany, the latter being a company controlled by the German subjects, and Filipinas,
being a company under American jurisdiction when said policy was issued. On 19 April 1943, Filipinas,
however, in pursuance of the order of the Director of Bureau of Financing, Philippine Executive Commission,
paid to the respondent the sum of P92,650.
On 06 August 1946, Filipinas filed an action before the CFI of Manila to recover from Christern the sum of
P92,650. The CFI dismissed the action and the CA affirmed the decision, thus, this petition for certiorari.
ISSUE:
Whether Christern Huenefield & Co., Inc. became an enemy corporation, thus is not entitled to claim the
indemnity from the policy.
RULING:
Yes, Christern Heunefield, having a majority of German stockholders, became an enemy corporation upon
the outbreak of the war between the United States and Germany. The Philippine Insurance Law , in section
8, provides that “anyone except a public enemy may be insured." It stands to reason that an insurance policy
ceases to be allowable as soon as an insured becomes a public enemy.
The respondent having become an enemy corporation on December 10, 1941, the insurance policy issued
in its favor on October 1, 1941, by the petitioner (a Philippine corporation) had ceased to be valid and
enforcible, and since the insured goods were burned after December 10, 1941, and during the war, the
respondent was not entitled to any indemnity under said policy from the petitioner.
It results that the petitioner is entitled to recover what paid to the respondent under the circumstances on this
case. However, the petitioner will be entitled to recover only the equivalent, in actual Philippines currency of
P92,650 paid on April 19, 1943, in accordance with the rate fixed in the Ballantyne scale.
G.R. No. L-1669 August 31, 1950
PAZ LOPEZ DE CONSTANTINO vs. ASIA LIFE INSURANCE COMPANY
FACTS:
In consideration of the sum of P176.04 as annual premium duly paid to it, the Asia Life Insurance Company
(a foreign corporation incorporated under the laws of Delaware, U.S.A.), issued on September 27, 1941, its
Policy No. 93912 for P3,000, whereby it insured the life of Arcadio Constantino for a term of twenty years.
The first premium covered the period up to September 26, 1942. The plaintiff Paz Lopez de Constantino was
regularly appointed beneficiary. The policy contained these stipulations, among others:
This POLICY OF INSURANCE is issued in consideration of the written and printed application here for a copy of which
is attached hereto and is hereby made a part hereof made a part hereof, and of the payment in advance during the
lifetime and good health of the Insured of the annual premium of One Hundred fifty-eight and 4/100 pesos Philippine
currency1 and of the payment of a like amount upon each twenty-seventh day of September hereafter during the term
of Twenty years or until the prior death of the Insured. (Emphasis supplied.)

xxx xxx xxx

All premium payments are due in advance and any unpunctuality in making any such payment shall cause this policy to
lapse unless and except as kept in force by the Grace Period condition or under Option 4 below. (Grace of 31 days.)

After that first payment, no further premiums were paid. The insured died on September 22, 1944.
It is admitted that the defendant, being an American corporation , had to close its branch office in Manila by
reason of the Japanese occupation, i.e. from January 2, 1942, until the year 1945.
ISSUE:

G.R. No. L-4197 March 20, 1952

FIDELA SALES DE GONZAGA, plaintiff-appellant,
vs.
THE CROWN LIFE INSURANCE COMPANY, defendant-appellee.
Beltran and Anuat for appellant.
Nicodemus L. Dasig for appellee.
TUASON, J.:
This is one more case wherein the question of the effects of war in a pre-war insurance contracts is presented.
Reduced to their absolute essentials, the facts are that, on September 26, 1939 the Crown Life Insurance
Co., whose home office is in Toronto, Canada, issued to Ramon Gonzaga through its branch office in Manila
a 20-year endowment policy for P15,000. The insured paid in due time the agreed yearly premium, which
was P591.00, for three consecutive years, the last payment having been effected on September 6, 1941. On
account of the outbreak of war, no premiums were paid after that date, although the policy was continued in
force up to June 12, 1943, under its automatic premium loan clause.
Ramon Gonzaga died on June 27, 1945 from an accident. Unsuccessful in her attempt to collect the amount
of the policy his widow and the beneficiary named in the policy began this suit on December 18, 1947. The
defendant set up the defense that the policy had lapsed by non-payment of the stipulated premiums of the
stipulated dates. And the trial court in a carefully written decision ruled against the plaintiff.
Ruling:
In the face of the Japanese Military decrees, which found sanctions in international law, the failure of the
defendant or its Filipino employees to advise the insured of the defendant's new address did not work as a
forfeiture of the right to have the premiums satisfied promptly. While clandestine transactions between the
parties during the war might be binding, it was not obligatory on the insurer, and it was well-nigh risky for its
employees, to send out notices to its widely scattered policy holders, what with the postal service under the
control and administration of the ruthless occupants.
There is no duty when the law forbids; and there is no obligation without corresponding right enjoyed by
another. The insured had no right to demand that the defendant maintain an office during the war, and the
defendant was not obligated to do so. Had the defendant not opened any office at all during the occupation
and stopped receiving premiums absolutely, the plaintiff's position would not have been any better or worse
for the closing and suspension of the defendant's business. Had the plaintiff's husband actually tendered his
premiums and the defendant's employees rejected them, he could not have insisted on the payment as a
matter of right. Stated otherwise, the defendant's opening of an interim office partook of the nature of the
privilege to the policy holders to keep their policies operative rather than a duty to them under the contract.
Of this privilege, incidentally, Gonzaga could have taken advantage if he was really intent on preserving his
policy. Uncontroverted or admitted is the fact that the defendant's agent, through whom he had been insured,
lived in Malabon, Rizal, and was his close acquaintance; and so were some of the defendant's Filipino
employees who handled the insurance business of Hanson, Orth and Stevenson during the occupation. And
Gonzaga admittedly come to Manila on a visit every now and then, and could have, without difficulty,
contacted any of those people.
For another thing, the policy carried a clause providing for its reinstatement under certain conditions within
three years from the date of lapse on application of the insured. The present policy lapsed on June 12, 1943,
the Company's Manila branch was reopened on May 1, 1945 and resumed regular business through the
same general agents at the Wilson Building on Juan Luna Street, Manila and Ramon Gonzaga died on June
27, 1945. It is undoubted that Gonzaga knew all that. It is not denied that he was an employee in the United
States Navy, that the united States Navy had an office in the same Wilson Building, and that he came at least
twice a month to that office for his salary.
Both in law and in reason, the action was properly dismissed and the appealed decision is hereby affirmed,
with costs.

G.R. No. L-7667 November 28, 1955

CHERIE PALILEO, plaintiff-appellee,
vs.
BEATRIZ COSIO, defendant-appellant.
FACTS:
On December 18, 1951, plaintiff obtained from defendant a loan in the sum of P12,000 subject to the following
conditions: (a) that plaintiff shall pay to defendant an interest in the amount of P250 a month; (b) that
defendant shall deduct from the loan certain obligations of plaintiff to third persons amounting to P4,550, plus
the sum of P250 as interest for the first month; and (c) that after making the above deductions, defendant
shall deliver to plaintiff only the balance of the loan of P12,000.
Pursuant to their agreement, plaintiff paid to defendant as interest on the loan a total of P2,250.00
corresponding to nine months from December 18, 1951, on the basis of P250.00 a month, which is more
than the maximum interest authorized by law. To secure the payment of the aforesaid loan, defendant
required plaintiff to sign a document known as "Conditional Sale of Residential Building", purporting to convey
to defendant, with right to repurchase, a two-story building of strong materials belonging to plaintiff. This
document did not express the true intention of the parties which was merely to place said property as security
for the payment of the loan.
After the execution of the aforesaid document, defendant insured the building against fire with the Associated
Insurance & Surety Co., Inc. for the sum of P15,000, the insurance policy having been issued in the name of
defendant. The building was partly destroyed by fire and, after proper demand, defendant collected from the
insurance company an indemnity of P13,107.00. Plaintiff demanded from defendant that she be credited with
the necessary amount to pay her obligation out of the insurance proceeds but defendant refused to do so.
ISSUE:
RULING:
The rule is that "where a mortgagee, independently of the mortgagor, insures the mortgaged property in his
own name and for his own interest, he is entitled to the insurance proceeds in case of loss, but in such case,
he is not allowed to retain his claim against the mortgagor, but is passed by subrogation to the insurer to the
extent of the money paid." (Vance on Insurance, 2d ed., p. 654)Or, stated in another way, "the mortgagee
may insure his interest in the property independently of the mortgagor. In that event, upon the destruction of
the property the insurance money paid to the mortgagee will not inure to the benefit of the mortgagor, and
the amount due under the mortgage debt remains unchanged. The mortgagee, however, is not allowed to
retain his claim against the mortgagor, but it passes by subrogation to the insurer, to the extent of the
insurance money paid." (Vance on Insurance, 3rd ed., pp. 772-773) This is the same rule upheld by this Court
in a case that arose in this jurisdiction. In the case mentioned, an insurance contract was taken out by the
mortgagee upon his own interest, it being stipulated that the proceeds would be paid to him only and when
the case came up for decision, this Court held that the mortgagee, in case of loss, may only recover upon
the policy to the extent of his credit at the time of the loss. It was declared that the mortgaged had no right of
action against the mortgagee on the policy. (San Miguel Brewery vs. Law Union, 40 Phil., 674.)
The correct solution should be that the proceeds of the insurance should be delivered to the defendant but
that her claim against the plaintiff should be considered assigned to the insurance company who is deemed
subrogated to the rights of the defendant to the extent of the money paid as indemnity.