Tiu vs. Arriesgado G.R. No. 138060, September 1, 2004

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Tiu vs. Arriesgado 

G.R. No. 138060

September 1, 2004

Subject: Insurance Law

Principle: Where the insurance contract provides for indemnity against liability to third person, such persons can directly sue the insurer, as an exception to the rule on mutuality of contract.

 

FACTS: On March 15, 1987, a truck owned by Condor was travelling along Poblacion, Compostela, Cebu blew one of its rear tires.  The truck driver parked the truck on the right side of the highway, left the rear lights on, and instructed the helper to place spare tire on the road few meters away from the truck to serve as warning device. The driver went to get assistance.

 

Thereafter, D’Rough Riders passenger bus was cruising along the highway in the same direction. Its driver saw the stalled truck 25 meters away but it was too late. The bus rammed on the rear part of the truck resulting in the injury of its passengers, including Arriesgado and his wife, who eventually died from her injuries.

 

Arriesgado filed a complaint for breach of contract of carriage against D’Rough Riders and its driver. For its part, Tiu (owner of D’Rough Riders) filed a third party complaint against its insurer, PPSII, the owner of the truck and its driver. He claimed that PPSII, as insurer, should be held solidarily liable with Tiu. PPSII’s argument: There is a contract of insurance (TPL) but it had already settled the claims of those injured in the incident.

 

The trial court and the CA held in favor of Arriesgado. As to the liability of PPSII, CA held that no evidence was presented against PPSII so it cannot be held liable for Arriesgado’s claim

 

 

ISSUE: In third-party liability insurance, would it be possible for a third party to sue the insurer directly?

 

 

HELD: Yes. This is an exception to the rule on mutuality of contract. Whenever a contract contains stipulation for the benefit of a third person and the moment the third person communicates his assent thereto, the contract becomes binding upon him. The fact that a third person demands fulfillment of the insurance policy may be reasonably construed as an assent on his part to the benefit provided in the policy. This provision arms him with the requisite legal personality to bring an action on the insurance policy.

 

While it is true that where the insurance contract provides for indemnity against liability to third persons, and such persons can directly sue the insurer, the direct liability of the insurer under indemnity contracts against third party liability does not mean that the insurer can be held liable in solidum with the insured and/or the other parties found at fault. For the liability of the insurer is based on contract; that of the insured carrier or vehicle owner is based on tort.

 

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Sun Insurance Office Ltd. vs. CA, G.R. No. 92383, July 17, 1992

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Sun Insurance Office Ltd. vs. CA

G.R. No. 92383

July 17, 1992

 SUBJECT: INSURANCE LAW

Principle: Contributory negligence of the accused as to his death is not suicide or willful exposure to needless peril that would excuse the insurer from the payment of claims.

 

FACTS: Felix Lim, Jr. had a life insurance policy with Sun Insurance, with his wife Nerissa Lim, as beneficiary. Two months after its issuance, Lim died of gunshot. His secretary testified that, on the eve of his mother’s birthday, Lim was playing with his handgun, he removed the magazine thereon and playfully pointed that gun at her, and the secretary pushed it aside saying the gun might be loaded. Lim assured her that the gun was empty, he pointed it to his temple, what followed was a fatal explosion. Nerissa filed a claim with Sun Insurance. The latter denied on ground that the cause of Lim’s death was not an accident, i.e. it was a death consequent upon “the insured person attempting to commit suicide or willfully exposing himself to needless peril.”

 

ISSUE: Whether or not Sun Insurance be absolved of liability on ground that Lim willfully exposed himself to needless peril.

 

RULING: No. Suicide and willful exposure to needless peril are in pari materia because they both signify a disregard for one’s life. The only difference is in degree, as suicide imports a positive act of ending such life whereas the second act indicates a reckless risking of it that is almost suicidal in intent.

 

In this case, as the secretary testified, Lim had removed the magazine from the gun and believed it was no longer dangerous. He expressly assured her that the gun was not loaded. It is submitted that Lim did not willfully expose himself to needless peril when he pointed the gun to his temple because the fact is that he thought it was not unsafe to do so.

 

What bars the insured from recovering from the insurer on account of his own acts is a deliberate exposure to a known peril. While Lim was unquestionably negligent, this negligence does not bar his wife from recovering from proceeds of the policy from the insurer. Contributory negligence is not one of the grounds enumerated in the policy exonerating the insurer from liability.

 

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