Insurance Case Digest: Gercio v. Sun Life Assurance Co. of Canada (1925)

G.R. No. 23703           September 28, 1925Lessons Applicable: 

Blood relationship (Insurance) Revocable Designation (Insurance)

FACTS:

January 29, 1910: Sun Life Assurance Co. of Canada issued a 20-year endowment insurance policy on the life of Hilario Gercio

o insurance company agreed to insure the life of Gercio for the sum of P2,000, to be paid him on February 1, 1930, or if the insured should die before said date, then to his wife, Mrs. Andrea Zialcita, should she survive him; otherwise to the executors, administrators, or assigns of the insured

o policy did not include any provision reserving to the insured the right to change the beneficiary

End of 1919: she was convicted of the crime of adultery September 4, 1920: a decree of divorce was issued  March 4, 1922: Gercio formally notified the Sun Life that he had revoked his

donation in favor of Andrea Zialcita, and that he had designated in her stead his present wife, Adela Garcia de Gercio, as the beneficiary of the policy

o Sun Life refused Gercio filed a petition for mandamus to compel Sun Life 

Trial Court: favored Gercio

ISSUE: W/N Gercio has the right to change the beneficiary of the policy

HELD: NO. Dismissed.

The wife has an insurable interest in the life of her husband.  The beneficiary has an absolute vested interest in the policy from the date of its

issuance and delivery. So when a policy of life insurance is taken out by the husband in which the wife is named as beneficiary, she has a subsisting interest in the policy

o applies to a policy to which there are attached the incidents of a loan value, cash surrender value, an automatic extension by premiums paid, and to an endowment policy, as well as to an ordinary life insurance policy. 

If the husband wishes to retain to himself the control and ownership of the policy he may so provide in the policy. 

o But if the policy contains no provision authorizing a change of beneficiary without the beneficiary's consent, the insured cannot make such change. 

Accordingly, it is held that a life insurance policy of a husband made payable to the wife as beneficiary, is the separate property of the beneficiary and beyond the control of the husband.

effect produced by the divorce, the Philippine Divorce Law, Act No. 2710, merely provides in section 9 that the decree of divorce shall dissolve the community property as soon as such decree becomes final

o absence of a statute to the contrary, that if a policy is taken out upon a husband's life the wife is named as beneficiary therein, a subsequent divorce does not destroy her rights under the policy

Neither the husband, nor the wife, nor both together had power to destroy the vested interest of the children in the policy.

  

Gercio v. Sun Life Assurance Co. of Canada (1925)

Malcolm, J.

Facts:

•On January 29, 1910, an insurance policy was issued on the life of Hilario Gercio by Sun Life Assurance Co.

•Being a twenty-year endowment policy, the insurance company agreed to pay him P2,000 on February 1, 1930. If he dies before said date, the beneficiary would be Andrea Zialcita, who was then his lawful wife, if she should survive him. Otherwise, it would be the executors, administrators, or assigns.

•The policy did not include any provision reserving to the insured the right to change the beneficiary.

•Near the end of 1919, Andrea was convicted of adultery. On September 4, 1920, a decree of divorce was issued which had the effect of completely dissolving the bonds of matrimony contracted between Hilario and Andrea.

•On March 4, 1922, Hilario formally notified Sun Life that he had revoked his donation in favor of Andrea Zialcita, and that he had designated in her stead his present wife, Adela Garcia de Gercio, as the beneficiary of the policy.

•He requested to eliminate Andrea as the beneficiary. Sun Life refused.

Issue:

WON the insured husband has the power to change the former wife’s designation as beneficiary where the insured and the beneficiary have been divorced and the policy of insurance does not expressly reserve to the insured the right to change the beneficiary?

Held/Ratio:

 NO.

•As a primary consideration, the Court dealt with which law to be applied among the Code of Commerce and the Civil Code which were both in force when the policy was taken out in 1910 or the Insurance Act No. 2427, which became effective in 1914, considering that the effort to change the beneficiary was made in 1922.

•Both the Code of Commerce and the Insurance Act were held to have no provision either permitting or prohibition the insured to change the beneficiary. Meanwhile, the application of Civil Code provisions was deemed problematic in light of characterizing an insurance policy as a donation, which by virtue of Article 1344, is prohibited between spouses.

•Therefore, the deficiencies in the law will have to be supplemented by the general principles prevailing on the subject. In light of this, the Court cited a handful of US cases.

•Generally, these cases ruled along the line that the beneficiary acquires a vested interest in the policy from the moment of its inception, and such property right cannot be impaired by any action of the insured unless such right has been expressly reserved him/her in the stipulations of the insurance policy.

•In the instant case, the wife had an insurable interest in the life of her husband upon the issuance of the policy and has acquired an absolute vested interest therein. Since the policy contained no provision authorizing a change of beneficiary without the beneciary’s consent, the insured cannot make such a change.

•The Court accordingly held that the life insurance policy of the husband made payable to his former wife as beneficiary is the separate property of the beneficiary and beyond the control of the husband.

•As the divorce merely dissolved the community property, and in the absence of a statute to the contrary, the subsequent divorce does not destroy the wife’s rights under the policy.

The Insular Life Assurance Company, Ltd. vs EbradoGR No. L-44059 October 28, 1977 80 SCRA 181

Facts:

Buenaventura Cristor Ebrado was issued by the Insular Life Assurance an insurancepolicy on a whole-life plan for P5,882.00 with a rider for Accidental Death Benefits for the sameamount. He designated Carponia T. Ebrado, his common-law wife, as his revocable beneficiaryin his policy. In the policy he referred to her as his wife.Time came when Buenaventura died from a falling tree branch. Carponia filed a claim tothe insurance company to get the proceeds as the designated beneficiary. She admits however that the deceased-insured and she lived together as husband and wife without the benefit of marriage.Pascual T. Ebrado, also filed a claim to the insurance company, this time claiming to bethe legal wife Buenaventura. She asserts that she has a better right over the proceeds thanCarponia who is a 

common-law wife.As the insurance company is at a loss as to whom to give the proceeds, it commencedan action for interpleader in court.

Issue: Whether a common-law wife named as a beneficiary in the life insurance policy of a legallymarried man entitled to claim the proceeds thereof in case of the death of the latter.

Held:

A common-law wife named as a beneficiary in the life insurance policy of a legallymarried man cannot claim the proceeds thereof in case the death of the latter.The contract of insurance is govern by the provisions of the new civil code on mattersnot specifically provided for in the insurance code.“xxx When not otherwise specifically provided for by the Insurance Law the contract of insurance is governed by the provisions of the civil law regulating contracts. And under Article2012 of the same Code, “any person who is forbidden from receiving any donation under article739 cannot be named beneficiary of a life insurance policy by the person who cannot make adonation to him.xxx”Under the Article 739, paragraph 1 specifically states “those made between persons whowere guilty of adultery or concubinage at the time of donation”. Thus common-law spouses arebarred from receiving donations from each other. Also conviction for adultery or concubinage isnot required as only preponderance of evidence is necessary.“In essence, a life insurance policy is no different from a civil donation insofar as thebeneficiary is concerned. Both are founded upon the same consideration: liberality. A beneficiary is like a donee, because the premiums of the policy which the insured pays out of liberality, the beneficiary will receive the proceeds or profits of said insurance.”

MANILA MAHOGANY MANUFACTURING CORPORATION VS. COURT OF APPEALS 154 SCRA 650 (G.R. NO. 52756) OCTOBER 12 1987

FACTS:

Petitioner insured its Mercedes Benz 4-door sedan with respondent insurance company . The insured vehicle was bumped and damaged by a truck owned by San Miguel Corporation. For the damage caused, respondent company paid petitioner ₱ 5,000.00 in amicable settlement. Petitioner’s general manager executed a Release of Claim, subrogating respondent company to all its right to action against San Miguel Corp..

Respondent company wrote the Insurer Adjusters, Inc. to demand reimbursements from San Miguel Corporation of the amount it had paid petitioner. Insurer Adjusters, Inc. refuse reimbursement alleging that San Miguel Corporation had already paid petitioner ₱ 4,500.00 for the damages to petitioner’s motor vehicle, as evidenced by a cash voucher and Release of Claim executed by the General Manager of petitioner discharging San Miguel Corporation from “ all actions, claims, demands the right of action that now exist or hereafter develop arising out of or as a consequence of the accident.

Respondent insurance company thus demanded from petitioner reimbursement of the sum of ₱ 4,500.00 paid by San Miguel Corporation. Petitioner refused.

ISSUE:

Whether or not the insurer is entitled to recover from the insured the amount of insurance money paid.

HELD:

“Although petitioner s right to file a deficiency claim against San Miguel Corporation is with legal basis, without prejudice to the insurer’s right of subrogation, nevertheless when Manila Mahogany executed another release claim (Exhibit K) discharging San Miguel Corporation from “all actions, claims, demands and rights of action that now exist or hereafter arising out of or as a consequence of the accident” after the insurer bad paid the proceeds of the policy—the compromise agreement of P5,000.00 being based on the insurance policy—the insurer is entitled to recover from the insured the amount of insurance money paid, Since petitioner by its own acts released San Miguel Corporation, thereby defeating private respondent’s right of subrogation, the right of action of petitioner against the insurer was also nullified. Otherwise stated: private respondent may recover the sum of P5,000.00 it had earlier paid to petitioner.

As held in Phil Air Lines v. Heald Lumber Co,; If a property is insured and the owner receives the indemnity from the insurer, it is provided in [Article 2207 of the New Civil Code] that the insurer is deemed subrogated to the rights of the insured against the wrongdoer and if the amount paid by the insurer does not fully cover the loss, then the aggrieved party is the one entitled to recover the deficiency. x x x Under this legal provision, the real party in interest with regard to the portion of the indemnity paid is the insurer and not the insured.

—”The right of subrogation can only exist after the insurer has paid the insured, otherwise the insured will be deprived of his right to full indemnity. If the insurance proceeds are not sufficient to cover the damages suffered by the insured, then he may sue the party responsible for the damage for the the [sic] remainder, To the extent of the amount he has already received from the insurer, the insurer enjoy’s [sic] the right of subrogation. Since the insurer can be subrogated to only such rights as the insured may have, should the insured, after receiving payment from the insurer. release the wrongdoer who caused the loss, the insurer loses his rights against the latter. But in such a case, the insurer will be entitled to recover from the insured whatever it has paid to the latter, unless the release was made with the consent of the insurer.”

PAN MALAYAN INSURANCE CORP. v CAApril 3, 1990FACTS:•Canlubang Automotive Resources Corp. obtained from PanMalay an insurance for its MitsubishiColt Lancer .•While the policy was still in effect, the insured car was hit by a pick-up owned by Erlinda Fabie butdriven by another person. The car suffered damages in the amount of P42K.•Panmalay defrayed the cost of repair of the insured car. It then demanded reimbursement fromFabie and her driver of said amount, but to no avail.

•Panmalay filed a complaint for damages with the RTC of Makati against Fabie and the driver.Panmalay averred that the damages caused to the insured car was settled under the “own damage”coverage of the insurance policy.•Private respondents filed a motion to dismiss alleging that Panmalay had no cause of action sincethe “won damage” clause of the policy precluded subrogation under Art. 2207 of the CC.Indemnification under said article is on the assumption that there was no wrongdoer or no 3rd party atfault.•RTC dismissed Panmalay’s complaint. RTC held that payment by Panmalay under the “owndamage” clause was an admission by the insurer that the damage was caused by the assured and/or its representatives.CA affirmed, albeit on a somewhat different ground. Applying the ejusdem generis rule, CA heldthat Section III-I of the pplicy, which was the basis for the settlement of the claim against insurance, didnot cover damage arising from collision or overturning due to the negligence of 3rdparties as one of theinsurable risks.•Both tribunals concluded that Panmalay could not now invoke Art 2207 and claim reimbursement.ISSUE:WON Panmalay was subrogated to the rights of Canlubang against the driver and his employer HELD:Yes•Article 2207 of the CC is founded on the well-settled principle of subrogation.If the insured property is destroyed or damages through the fault or negligence of a party other than theassured, then the insurer, upon payment to the assured, will be subrogated to the right of the assured torecover from the wrongdoer to the extent that the insurer has been obligated to pay.Payment by the insurer to the assured operates as an equitable assignment to the former of all theremedies which the latter may have against the 3rd party whose negligence or wrongful act caused theloss.The right of subrogation is not dependent upon any privity of contract or upon written assignment of claim. It accrues simply upon payment of the insurance claim by the insurer.•There are exceptions to this rule:1.if the assured by his won act releases the wrongdoer or 3rd party liable for the loss or damage, fromliability2.where the insurer pays the assured the value of the lost goods without notifying the carrier who hasin good faith settled the assured’[s claim for loss3.where the insurer pays the assured for a loss which is not a risk covered by the policy (voluntarypymt)None of the exceptions are availing in the present case.•AS TO LC RULING: When Panmalay utilized the phrase “own damage”-- a pharase which,incidentally, is not found in the insurance policy—to define the basis for its settlement, it simply meantthat it had assumed to reimburse the costs for repairing the damage to the insured vehicle.It is in this sense that the so-called “own damage” coverage of policy is different from the “3rd partyliability” coverage and from the “property damae” coverage.•AS TO CA RULING: CA’s ruling that the coverage of the insured risks under Section III-I of thepolicy does not include damage to the insured vehicle arising from collision or overturning due tonegligent acts of a 3rd party, has no merit.Not only is it an erroneous interpretation of the provisions of the section, but it also violates afundamental rule on the interpretation of property insurance contracts where interpretation should beliberally in favor of the assured and strictly against the insurer in cases of disagreement between theparties.The meaning advanced by Panmalay regarding the coverage of 

Section III-I of the policy is undeniablemore beneficial to Canlubang than that insisted upon by the CA.In any case, the very parties to the policy, Canlubang and Panmalay, were not shown to be indisagreement regarding the meaning and coverage of Section III-I. Hence, it was improper for CA toassert its own interpretation of the contract that is contrary to the clear understanding and intention of the parties to it.•Thus, SC held that Panmalay, as subrogee, has no legal obstacle from filing the complaint for damages against the 3rd parties responsible for the damage to the car.Attorney’s fees and expenses of litigationArt. 2208. In the absence of stipulation, attorney's fees and expenses of litigation, other than judicialcosts, cannot be recovered, except:(1) When exemplary damages are awarded;(2) When the defendant's act or omission has compelled the plaintiff to litigate with third persons or toincur expenses to protect his interest;(3) In criminal cases of malicious prosecution against the plaintiff;(4) In case of a clearly unfounded civil action or proceeding against the plaintiff;(5) Where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff's plainlyvalid, just and demandable claim;(6) In actions for legal support;(7) In actions for the recovery of wages of household helpers, laborers andskilled workers;(8) In actions for indemnity under workmen's compensation and employer's liability laws;(9) In a separate civil action to recover civil liability arising from a crime;(10) When at least double judicial costs are awarded;(11) In any other case where the court deems it just and equitable that attorney's fees and expenses of litigation should be recovered.In all cases, the attorney's fees and expenses of litigation must be reasonable.

  Compania Maritima v. Insurance Co. of North America12 SCRA 213Facts:Macleod & Co., contracted, first by telephone and later confirmed by a formal written booking issued by Macleod & Co., the services of the petitioner Compania Maritima for the shipment of bales of lamp from Davao to Manila. Two lighters of the petitioners loaded the said cargo from Macleod’s wharf at Davao awaiting the arrival of another vessel of the petitioner for reloading. One of the lighters sunk of which Macleod suffered a total of P64,018. Respondent insurers of said cargo paid Macleod, and being subrogated to Macleod’s right, filed a claim to collect from the petitioner the amount it paid to Macleod. Petitioner denied liability on the grounds that there was no bill of lading issued thereby resulting to be non-existence of the contract; that the sinking was due to a fortuitous event and the respondent has no personality.Issue:Can respondent insurance company sue the carrier under its insurance contract as assignee of Macleod in spite of the fact that the liability of the carrier as insurer is not recognized in this jurisdiction?Held:

There can also be no doubt that the insurance company can recover from the carrier as assignee of the owner of the cargo for the insurance amount it paid to the latter under the insurance contract. And this is so because since the cargo that was damaged was insured with respondent company and the latter paid the amount represented by the loss, it is but fair that it be given the right to recover from the party responsible for the loss. The instant case, therefore, is not one between the insured and the insurer, but one between the shipper and the carrier, because the insurance company merely stepped into the shoes of the shipper. And since the shipper has a direct cause of action against the carrier on account of the damage of the cargo, no valid reason is seen why such action cannot be asserted or availed of by the insurance company as a subrogee

of the shipper. Nor can the carrier set up as a defense any defect in the insurance policy not only because it is not a privy to it but also because it cannot avoid its liability to the shipper under the contract of carriage which binds it to pay any loss that may be caused to the cargo involved therein. Thus, we find fitting the following comments of the Court of Appeals:

It was not imperative and necessary for the trial court to pass upon the question of whether or not the disputed abaca cargo was covered by Marine Open Cargo Policy No. MK-134 isued by appellee. Appellant was neither a party nor privy to this insurance contract, and therefore cannot avail itself of any defect in the policy which may constitute a valid reason for appellee, as the insurer, to reject the claim of Macleod, as the insured. Anyway, whatever defect the policy contained, if any, is deemed to have been waived by the subsequent payment of Macleod's claim by appellee. Besides, appellant is herein sued in its capacity as a common carrier, and appellee is suing as the assignee of the shipper pursuant to exhibit MM. Since, as above demonstrated, appellant is liable to Macleod and Company of the Philippines for the los or damage to the 1,162 bales of hemp after these were received in good order and condition by the patron of appellant's LCT No. 1025, it necessarily follows that appellant is likewise liable to appellee who, as assignee of Macleod, merely stepped into the shoes of and substi-tuted the latter in demanding from appellant the payment for the loss and damage aforecited.

Enriquez v. SunLife- Insurance Policy 41 PHIL 269

Facts:

>  On Sept. 24 1917, Herrer made an application to SunLife through its office in Manila for life annuity.

>  2 days later, he paid the sum of 6T to the company’s anager in its Manila office and was given a receipt.

>  On Nov. 26, 1917, the head office gave notice of acceptance by cable to Manila.  On the same date, the Manila office prepared a letter notifying Herrer that his application has been accepted and this was placed in the ordinary channels of transmission, but as far as known was never actually mailed and never received by Herrer.

>  Herrer died on Dec. 20, 1917.  The plaintiff as administrator of Herrer’s estate brought this action to recover the 6T paid by the deceased.

Issue:

Whether or not the insurance contract was perfected.

Held:

NO.

The contract for life annuity was NOT perfected because it had NOT been proved satisfactorily that the acceptance of the application ever came to the knowledge of the applicant.  An acceptance of an offer of insurance NOT actually or constructively communicated to the proposer does NOT make a contract of insurane, as the locus poenitentiae is ended when an acceptance has passed beyond the control of the party.

NOTE: Life annuity is the opposite of a life insurance.  In life annuity, a big amount is given to the insurance company, and if after a certain period of time the insured is stil living, he is entitled to regular smaller amounts for the rest of his life. Examples of Life annuity are pensions.  Life Insurance on the other hand, the insured during the period of the coverage makes small regular payments and upon his death, the insurer pays a big amount to his beneficiaries.

Ang Giok Chip v Springfield G.R. No. L-33637 December 31, 1931

J. Malcolm

Facts:Ang insured his warehouse for the total value of Php 60,000. One of these, amounting to 10,000, was with Springfield Insurance Company.  His warehouse burned down, then he attempted to recover 8,000 from Springfield for the indemnity. The insurance company interposed its defense on a rider in the policy in the form of Warranty F,  fixing the amount of hazardous good that can be stored in a building to be covered by the insurance. They claimed that Ang violated the 3 percent limit by placing hazardous goods to as high as 39 percent of all the goods stored in the building. His suit to recover was granted by the trial court.  Hence, this appeal.

Issue: Whether a warranty referred to in the policy as forming part of the contract of insurance and in the form of a rider to the insurance policy, is null and void because not complying with the Philippine Insurance Act.

Held: No. The warranty is valid. Petition dismissed.

Ratio:

The Insurance Act, Section 65, taken from California law, states: "Every express warranty, made at or before the execution of a policy, must be contained in the policy itself, or in another instrument signed by the insured and referred to in the policy, as making a part of it."Warranty F, indemnifying for a value of Php 20,000 and pasted on the left margin of the policy stated:It is hereby declared and agreed that during the currency of this policy no hazardous goods be stored in the Building to which this insurance applies or in any building communicating therewith, provided, always, however, that the Insured be permitted to stored a small quantity of the hazardous goods specified below, but not exceeding in all 3 per cent of the total value of the whole of the goods or merchandise contained in said warehouse, viz; . . . .Also, the court stated a book that said,  "any express warranty or condition is always a part of the policy, but, like any other part of an express contract, may be written in the margin, or contained in proposals or documents expressly referred to in the policy, and so made a part of it."“It is well settled that a rider attached to a policy is a part of the contract, to the same extent and with like effect as it actually embodied therein. In the second place, it is equally well settled that an express warranty must appear upon the face of the policy, or be clearly incorporated therein and made a part thereof by explicit reference, or by words clearly evidencing such intention.”The court concluded that Warranty F is contained in the policy itself, because by the contract of insurance agreed to by the parties it was made to be a part. It wasn’t aseparate instrument agreed to by the parties. The receipt of the policy by the insured without objection binds him. It was his duty to read the policy and know its terms. He also never chose to accept a different policy by considering the earlier one as a mistake. Hence, the rider is valid.

CEREZO VS THE ATLANTIC & PACIFIC COMPANY G.R. No. L-10107 Date: February 4, 1916 Plaintiff- appellant: Clara Cerezo Defendant-appellant: The Atlantic Gulf & Pacific Company Ponente: Trent, J.

FACTS:

The deceased was an employee of the defendant as a day laborer on the 8th of July, 1913, assisting in laying gas pipes on Calle Herran in the city of Manila. The digging of the trench was completed both ways from the cross-trench in Calle Paz, and the pipes were laid therein up to that point. The men of the deceased's gang were filling the west end, and there was no work in the progress at the east end of the trench. Shortly after the deceased entered the trench at the east end to answer a call of nature, the bank caved in, burying him to his neck in dirt, where he died before he could be released. It has not been shown that the deceased had received orders from the defendant to enter the trench at this point; nor that the trench had been prepared by the defendant as a place to be used as a water-closet; nor that did the defendant acquiesce in the using of this place for these purposes. The trench at the place where the accident occurred was between 3 and 4 feet deep. Nothing remained to be done there except to refill the trench as soon as the pipes were connected. The refilling was delayed at that place until the completion of the connection. At the time of the accident the place where the deceased's duty of refilling the trench required

him to be was at the west end. There is no contention that there was any danger whatever in the refilling of the trench.

An action for damages was instated against the defendant for negligently causing the death of the plaintiff's son, Jorge Ocumen, on the 7th of July, 1913

The plaintiff insists that the defendant was negligent in failing to shore or brace the trench at the place where the accident occurred. While, on the other hand, the defendant urges (1) that it was under no obligation, in so far as the deceased was concerned, to brace the trench, in the absence of a showing that the soil was of a loose character or the place itself was dangerous, and (2) that although the relation of master and servant may not have ceased, for the time being, to exist, the defendant was under no duty to the deceased except to do him no intentional injury, and to furnish him with a reasonably safe place to work.

udgment was entered in a favor of the plaintiff for the sum of ₱ 1,250.00, together with interest and costs. Defendant appealed.

ISSUES:

1. Whether or not the plaintiff has a right to recover for damages under the Employer’s Liability Act (Act No. 1874) or the Civil Code; and

2. Whether or not it is necessary to determine the effect of the former upon the law of industrial accidents in this country?

HELD:

1. The Plaintiff cannot recover from neither laws, an overwhelming jurisprudence holds master was bound to exercise that measure of care which reasonably prudent men take under similar circumstances. But the master was not an insurer and was not required to provide the safest possible plant or to adopt the latest improvements or to warrant against latent defects which a reasonable inspection did not disclose. It was only necessary that the danger in the work be not enhanced through his fault. It is provided further that;

the right of the master to shift responsibility for the performance of all or at least most of these personal duties to the shoulders of a subordinate and thereby escape liability for the injuries suffered by his workmen through his non- performance of these duties, was, in England, definitely settled by the House of Lords in the case of Wilson vs. Merry (L.R. 1 H.L. Sc. Appl Cas., 326; 19 Eng. Rul. Cas., 132). This was just two years before the enactment of the Employers' Liability Act of 1880, and no doubt the full significance of such a doctrine was one of the impelling causes which expedited the passage of the Act, and chiefly accounts for the presence in it of subsection 1 of section 1.

The cause of Ocumen's death was not the weight of the earth which fell upon him, but was due to suffocation. He was sitting or squatting when the slide gave way. Had he been even half-erect, it is highly probable that he would have escaped suffocation or even serious injury. Hence, the accident was of a most unusual character. Experience and common sense demonstrate that

ordinarily no danger to employees is to be anticipated from such a trench as that in question. The fact that the walls had maintained themselves for a week, without indication of their giving way, strongly indicates that the necessity for bracing or shoring the trench was remote. To require the company to guard against such an accident as the one in question would virtually compel it to shore up every foot of the miles of trenches dug by it in the city of Manila for the gas mains. Upon a full consideration of the evidence, we are clearly of the opinion that ordinary care did not require the shoring of the trench walls at the place where the deceased met his death. The event properly comes within the class of those which could not be foreseen; and, therefore, the defendant is not liable under the Civil Code (Article 1105, Civil Code).

2. Yes. Act No. 1874 is essentially a copy of the Massachusetts Employers' Liability Act. We now come to the consideration of Act No. 1874 for the purpose of determining what effect this Act has had upon the law of damages in personal injury cases in this country, bearing in mind that the Act is, as we have indicated, essentially a copy of the Massachusetts Employers' Liability Act which has "prevailed in the State of Massachusetts some years and upon which interpretations have been made by the Massachusetts courts, defining the exact meaning of the provision of the law." (Special report of the joint committee of the Philippine Legislature on the Employers' Liability Act, Commission Journal 1908, p. 296.) We agree with the Supreme Court of Massachusetts that the Act should be liberally construed in favor of employees. The main purpose of the Act, as its title indicates, was to extend the liability of employers and to render them liable in damages for certain classes of personal injuries for which it was thought they were liable under the law prior to the passage of the Act.

Filipinas Cia de Seguros vs Christern 89 Phil 54

Fact:On October 1, 1941, the respondent corporation, Christern Huenefeld and Co., Inc., after payment of corresponding premium, obtained from the petitioner, Filipinas Cia de Seguros fire policy covering merchandise contained in a building located at Binondo, Manila. On February 27, 1942 or during the Japanese military occupation, the building and insured merchandise were burned. In due time the respondent submitted to the petitioner its claim under the policy. The petitioner refused to pay the claim on the ground that the policy in favor of the respondent that ceased to be a force on the date the United States declared war against Germany, the respondent corporation (through organized under and by virtue of the laws of Philippines) being controlled by German subjects and the petitioner being a company under American jurisdiction when said policy was issued on October 1, 1941. The theory of the petitioner is that the insured merchandise was burned after the policy issued in 1941 had ceased to be effective because the outbreak of the war between United States and Germany on December 10, 1941, and that the payment made by the petitioner to the respondent corporation during the Japanese military occupation was under pressure.

Issue:W/N a public enemy can be insured.

Ruling:Since the majority of stockholders of the respondent corporation were German subjects, the respondent became an enemy of the state upon the outbreak of the war between US and Germany. The English and American cases relied upon by the Court of Appeals lost in force upon the latest decision of the Supreme Court of US in which the control test has adopted.Since World War I, the determination of enemy nationality of corporations has been discussed in many countries, belligerent and neutral. A corporation was subject to enemy legislation when it was controlled by enemies, namely managed under the influence of individuals or corporations themselves considered as enemies...

The Philippine Insurance Law (Act No 2427, as amended), 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.

It stands to reason that an insurance policy ceases to be allowable as soon as an insured becomes a public enemy. Christern should return the amount it was earlier paid.