JURISTS BAR REVIEW CENTER™

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2018 POINTS TO PONDER COMMERCIAL LAWS

A Survey of the Relevant Doctrines of the Ponencias of
SUPREME COURT ASSOCIATE JUSTICE
MARIANO DEL CASTILLO
Chairperson, 2018 Bar Examinations

Compiled by:

PROF. E.H. BALMES

HAND OUT NO. 1, SERIES OF 2018

No one will be able to stand against you all the days of your life.
As I was with Moses, so I will be with you;
I will never leave you nor forsake you.
(JOSHUA 1:5)

THE INSULAR LIFE ASSURANCE COMPANY, LTD. vs. PAZ Y. KHU et. al.
G.R. No. 195176 April 18, 2016

The date of last reinstatement mentioned in Section 48 of the Insurance Code pertains to the date that the
insurer approved· the application for reinstatement. However, in light of the ambiguity in the insurance
documents to this case, this Court adopts the interpretation favorable to the insured in determining the
date when the reinstatement was approved.

FACTS:
Felipe N. Khu, Sr. (Felipe) applied for a life insurance policy with Insular Life under the latter’s Diamond
Jubilee Insurance Plan. Felipe accomplished the required medical questionnaire wherein he did not
declare any illness or adverse medical condition. Insular Life thereafter issued him a policy with a face
value of P1 million. This took effect on June 22, 1997.

On June 23, 1999, Felipe’s policy lapsed due to non-payment of the premium covering the period from
June 22, 1999 to June 23, 2000.

 Member, UP Law Center Committee on the Suggested Answers in Commercial Law and Legal and Judicial
Ethics.
 MCLE and Bar Reviewer in Legal Ethics and Commercial Law - Jurists Bar Review Center, Cosmopolitan Review
Center, CPRS Bar Review Center, Luminous Bar Review, Dagupan, Powerhaus Review Center, Chan Robles
Internet Review, PCU Bar Review, Albano Review Center and UP LAW Center.
 Member, Law Faculty (On Leave) University of Batangas, Far Eastern University, Polytechnic University of the
Philippines, Philippine Christian University, Universidad de Manila, Centro Escolar University

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2018 PRE BAR POINTS TO PONDER IN COMMERCIAL LAW,
From the Ponencias of Associate Justice MARIANO DEL CASTILLO,
Chairperson, 2018 Bar Examinations
PROF. E.H. BALMES
 JURISTS BAR REVIEW CENTER™
THESE NOTES ARE MEANT TO BE SHARED,
SHARING THEM IS A GOOD KARMA WAITING TO HAPPEN

On September 7, 1999, Felipe applied for the reinstatement of his policy and paid P25,020.00 as
premium.

On October 12, 1999, Insular Life advised Felipe that his application for reinstatement may only be
considered if he agreed to certain conditions such as payment of additional premium and the cancellation
of the riders pertaining to premium waiver and accidental death benefits. Felipe agreed to these
conditions. Subsequently, Felipe died.

On October 5, 2001, Paz Y. Khu, Felipe Y. Khu, Jr. and Frederick Y. Khu (collectively, Felipe’s
beneficiaries or respondents) filed with Insular Life a claim for benefit under the reinstated policy. This
claim was denied. Instead, Insular Life advised Felipe’s beneficiaries that it had decided to rescind the
reinstated policy on the grounds of concealment and misrepresentation by Felipe.

Hence, respondents instituted a complaint for specific performance with damages. Respondents prayed
that the reinstated life insurance policy be declared valid, enforceable and binding on Insular Life; and
that the latter be ordered to pay unto Felipe’s beneficiaries the proceeds of this policy, among others.

ISSUE:

Whether or not the insured’s reinstated life insurance policy is already incontestable at the time of his
death.

HELD:

Yes. The insurer is deemed to have the necessary facilities to discover such fraudulent concealment or
misrepresentation within a period of two (2) years. It is not fair for the insurer to collect the premiums as
long as the insured is still alive, only to raise the issue of fraudulent concealment or misrepresentation
when the insured dies in order to defeat the right of the beneficiary to recover under the policy.

At least two (2) years from the issuance of the policy or its last reinstatement, the beneficiary is given the
stability to recover under the policy when the insured dies. The provision also makes clear when the two-
year period should commence in case the policy should lapse and is reinstated, that is, from the date of the
last reinstatement’
.
More than two years had lapsed from the time the subject insurance policy was reinstated on June 22,
1999 vis-a-vis Felipe’s death on September 22, 2001. As such, the subject insurance policy has already
become incontestable at the time of Felipe’s death.

MANULIFE PHILIPPINES, INC. vs. HERMENEGILDA YBAÑEZ

G.R. No. 204736 November 28, 2016.

FACTS:

Before the RTC of Makati City, Manulife Philippines, Inc. (Manulife) instituted a Complaint for
Rescission of Insurance Contracts against Hermenegilda Ybañez (Hermenegilda) and the BPI Family
Savings Bank (BPI Family) alleging that Insurance Policy Nos. 6066517-1 8 and 6300532-6 9 (subject
insurance policies) which Manulife issued in favor of Dr. Gumersindo Solidum Ybañez (insured), were
void due to concealment or misrepresentation of material facts in the latter's applications for life
insurance. The Death Certificate dated November 17, 2003 stated that the insured had "Hepatocellular
CA., Crd Stage 4, secondary to Uric Acid Nephropathy; SAM Nephropathy recurrent malignant pleural

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2018 PRE BAR POINTS TO PONDER IN COMMERCIAL LAW,
From the Ponencias of Associate Justice MARIANO DEL CASTILLO,
Chairperson, 2018 Bar Examinations
PROF. E.H. BALMES
 JURISTS BAR REVIEW CENTER™
THESE NOTES ARE MEANT TO BE SHARED,
SHARING THEM IS A GOOD KARMA WAITING TO HAPPEN

effusion; NASCVC", after conducting an investigation, Manulife thereafter concluded that the insured
misrepresented or concealed material facts at the time the subject insurance policies were applied for; and
that for this reason. Manulife accordingly denied Hermenegilda's death claims and refunded the premiums
that the insured paid on the subject insurance policies.

In her Answer, Hermenegilda countered that Manulife's own insurance agent, Ms. Elvira Monteclaros
herself assured the insured, that there would be no problem regarding the application for the insurance
policy. In fact, it was Monteclaros who filled up everything in the questionnaire, so that all that the
insured needed to do was sign it, and it's done.

The RTC found no merit at all in Manulife's Complaint for rescission of the subject insurance policies
because it utterly failed to prove that the insured had committed the alleged misrepresentation/s or
concealment/s.

The CA, like the RTC, found Manulife's Complaint bereft of legal and factual bases. The CA held that
there is no basis for Manulife's claim that it is exempted from the duty of proving the insured's supposed
misrepresentation/s or concealment/s, as these had allegedly been admitted already in Hermenegilda's
Answer. In the absence of authentication by a competent witness, the purported CDH medical records of
the insured are deemed hearsay hence, inadmissible, and devoid of probative value; and that the medical
certificate, even if admitted in evidence as an exception to the hearsay rule, was still without probative
value because the physician or doctor or the hospital's official who issued it, was not called to the witness
stand to validate it or to attest to it.

ISSUE:
Whether the CA committed any reversible error in affirming the RTC Decision dismissing Manulife's
Complaint for rescission of insurance contracts for failure to prove concealment on the part of the insured.

HELD:
The RTC correctly held that the CDH's medical records that might have established the insured's
purported misrepresentation/s or concealment/s was inadmissible for being hearsay, given the fact that
Manulife failed to present the physician or any responsible official of the CDH who could confirm or
attest to the due execution and authenticity of the alleged medical records. Manulife had utterly failed to
prove by convincing evidence that it had been beguiled, inveigled, or cajoled into selling the insurance to
the insured who purportedly with malice and deceit passed himself off as thoroughly sound and healthy,
and thus a fit and proper applicant for life insurance. Manulife's sole witness gave no evidence at all
relative to the particulars of the purported concealment or misrepresentation allegedly perpetrated by the
insured. In fact, Victoriano merely perfunctorily identified the documentary exhibits adduced by
Manulife; she never testified in regard to the circumstances attending the execution of these documentary
exhibits much less in regard to its contents. Of course, the mere mechanical act of identifying these
documentary exhibits, without the testimonies of the actual participating parties thereto, adds up to
nothing. These documentary exhibits did not automatically validate or explain themselves. "The
fraudulent intent on the part of the insured must be established to entitle the insurer to rescind the
contract. Misrepresentation as a defense of the insurer to avoid liability is an affirmative defense and the
duty to establish such defense by satisfactory and convincing evidence rests upon the insurer.” For failure
of Manulife to prove intent to defraud on the part of the insured, it cannot validly sue for rescission of
insurance contracts.

MARINA PORT SERVICES, INC. VS. AMERICAN HOME ASSURANCE CORPORATION

G.R. No. 201822 August 12, 2015
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2018 PRE BAR POINTS TO PONDER IN COMMERCIAL LAW,
From the Ponencias of Associate Justice MARIANO DEL CASTILLO,
Chairperson, 2018 Bar Examinations
PROF. E.H. BALMES
 JURISTS BAR REVIEW CENTER™
THESE NOTES ARE MEANT TO BE SHARED,
SHARING THEM IS A GOOD KARMA WAITING TO HAPPEN

FACTS:
Countercorp Trading PTE., Ltd. shipped from Singapore to the Philippines 10 container vans of wheat
flour with seals intact on board the vessel M/V Uni Fortune. The shipment was insured against all risks by
AHAC and consigned to MSC Distributor (MSC).

Upon arrival at the Manila South Harbor, the shipment was discharged in good and complete order
condition and with safety seals in place to the custody of the arrastre operator, MPSI. After unloading and
prior to hauling, agents of the Bureau of Customs officially broke the seals, opened the container vans,
and examined the shipment for tax evaluation in the presence of MSC's broker and checker. Thereafter
closed the container vans and refastened them with safety wire seals while MSC's broker padlocked the
same. MPSI then placed the said container vans at the delivery area of the harbor's container yard,
watched over by the security guards of MPSI and of the Philippine Ports Authority.

Soon after, MSC's representative, AD's Customs Services (ACS), took out five container vans for delivery
to MSC. However, MSC discovered substantial shortages in the number of bags of flour delivered. It filed
a formal claim for loss with MPSI.

ACS took out the remaining five container vans from the container yard and delivered them to MSC.
Upon receipt, MSC once more discovered substantial shortages. Thus, MSC filed another claim with
MPSI.

The total number of the missing bags of flour was 1,650 with a value of £257,083.00.

MPSI denied both claims of MSC. MSC sought insurance indemnity for the lost cargoes from AHAC.
AHAC paid MSC the value of the missing bags of flour after finding the latter's claim in order. In turn,
MSC issued a subrogation receipt in favor of AHAC.

Thereafter, AHAC filed a Complaint for damages against MPSI before the RTC.

RTC dismissed AHAC's Complaint. It held that while there was indeed a shortage of 1,650 sacks of soft
wheat flour, AHAC's evidence failed to clearly show that the loss happened while the subject shipment
was still under MPSI's responsibility.

AHAC appealed to the CA. CA granted the appeal. MPSI moved for reconsideration but the CA denied
the same.

ISSUE:
Whether MPSI is liable for the loss of the bags of flour

HELD:

NO. The shipment did not suffer loss or damage while it was under the care of the arrastre operator. There
was no other competent evidence that the container vans were re-opened or that their locks and seals were
broken for the second time, negating MPSI’s liability.

In case of claim for loss filed by a consignee or the insurer as subrogee, it is the arrastre operator that
carries the burden of proving compliance with the obligation to deliver the goods to the appropriate party.
It must show that the losses were not due to its negligence or that of its employees. It must establish that it
observed the required diligence in handling the shipment. Otherwise, it shall be presumed that the loss

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2018 PRE BAR POINTS TO PONDER IN COMMERCIAL LAW,
From the Ponencias of Associate Justice MARIANO DEL CASTILLO,
Chairperson, 2018 Bar Examinations
PROF. E.H. BALMES
 JURISTS BAR REVIEW CENTER™
THESE NOTES ARE MEANT TO BE SHARED,
SHARING THEM IS A GOOD KARMA WAITING TO HAPPEN

was due to its fault. In the same manner, an arrastre operator shall be liable for damages if the seal and
lock of the goods deposited and delivered to it as closed and sealed, be broken through its fault. Such fault
on the part of the arrastre operator is likewise presumed unless there is proof to the contrary.

Fault on the part of the depositary is presumed, unless there is proof to the contrary.

However, the person who prepared the said report was not presented in court to testify on the same. Thus,
the said survey report has no probative value for being hearsay. "It is a basic rule that evidence, whether
oral or documentary, is hearsay, if its probative value is not based on the personal knowledge of the
witness but on the knowledge of another person who is not on the witness stand.”

There being no other competent evidence that the container vans were re-opened or that their locks and
seals were broken for the second time, MPSI cannot be held liable for damages due to the alleged loss of
the bags of flour pursuant to Article 1981 of the Civil Code.

At any rate, the goods were shipped under "Shipper's Load and Count" arrangement. Thus, protection
against pilferage of the subject shipment was the consignees lookout.

MITSUBISHI MOTORS PHILIPPINES SALARIED EMPLOYEES UNION (MMPSEU) vs.

MITSUBISHI MOTORS PHILIPPINES CORPORATION (MMPC)
G.R. No. 175773 June 17, 2013

FACTS:
Petitioner Mitsubishi Motors Philippines Salaried Employees Union (MMPSEU) and Respondent
Mitsubishi Motors Philippines Corporation (MMPC) entered into a Collective Bargaining Agreement
(CBA) providing that the company shoulder the hospitalization expenses of the dependents of covered
employees subject to certain limitations and restrictions, thus:
SECTION 4. DEPENDENTS’ GROUP HOSPITALIZATION INSURANCE – The COMPANY shall
obtain group hospitalization insurance coverage or assume under a self-insurance basis hospitalization for
the dependents of regular employees up to a maximum amount of forty thousand pesos (₱40,000.00) per
confinement subject to the following:
a. xxx
xxx
d. Payment shall be direct to the hospital and doctor and must be covered by actual billings.
xxx

Petitioners asked for reimbursement of hospitalization expenses of the covered employees' dependents
paid/shouldered by the dependent's own health insurance from Respondents. However, Respondents
denied the claims contending that double insurance would result if the said employees would receive from
the company the full amount of hospitalization expenses despite having already received payment of
portions thereof from other health insurance providers.

ISSUE:
Whether the Petitioners are entitled to Reimbursement.

RULING:

The collateral source rule was originally applied to tort cases wherein the defendant is prevented from
benefiting from the plaintiff’s receipt of money from other sources. It finds no application to cases
involving no-fault insurances under which the insured is indemnified for losses by insurance companies,

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2018 PRE BAR POINTS TO PONDER IN COMMERCIAL LAW,
From the Ponencias of Associate Justice MARIANO DEL CASTILLO,
Chairperson, 2018 Bar Examinations
PROF. E.H. BALMES
 JURISTS BAR REVIEW CENTER™
THESE NOTES ARE MEANT TO BE SHARED,
SHARING THEM IS A GOOD KARMA WAITING TO HAPPEN

regardless of who was at fault in the incident generating the losses. Here, it is clear that Respondent is a
no-fault insurer. Hence, it cannot be obliged to pay the hospitalization expenses of the dependents of its
employees which had already been paid by separate health insurance providers of said dependents. The
conditions set forth in the CBA provision indicate an intention to limit Respondent’s liability only to
actual expenses incurred by the employees’ dependents, that is, excluding the amounts paid by
dependents’ other health insurance providers.

The condition that payment should be direct to the hospital and doctor implies that Respondent is only
liable to pay medical expenses actually shouldered by the employees’ dependents. It follows that
Respondent’s liability is limited, that is, it does not include the amounts paid by other health insurance
providers. This condition is obviously intended to thwart not only fraudulent claims but also double
claims for the same loss of the dependents of covered employees. To allow reimbursement of amounts
paid under other insurance policies shall constitute double recovery which is not sanctioned by law.
Being in the nature of a non-life insurance contract and essentially a contract of indemnity, the CBA
provision obligates Respondent to indemnify the covered employees’ medical expenses incurred by their
dependents but only up to the extent of the expenses actually incurred. This is consistent with the
principle of indemnity which proscribes the insured from recovering greater than the loss

MANILA BANKERS LIFE INSURANCE CORPORATION vs. ABAN

G.R. No. 175666 July 29, 2013
FACTS:

On July 3, 1993, Delia Sotero (Sotero) took out a life insurance policy from Manila Bankers Life
Insurance Corporation (Bankers Life), designating respondent Cresencia P. Aban (Aban), her niece, as her
beneficiary. Petitioner issued Insurance Policy No. 747411 (the policy), with a face value of P
100,000.00, in Sotero’s favor on August 30, 1993, after the requisite medical examination and payment of
the insurance premium. On April 10, 1996, when the insurance policy had been in force for more than two
years and seven months, Sotero died.

Respondent filed a claim for the insurance proceeds on July 9, 1996. Petitioner conducted an investigation
into the claim, and came out with the following findings:
1. Sotero did not personally apply for insurance coverage, as she was illiterate;
2. Sotero was sickly since 1990;
3. Sotero did not have the financial capability to pay the insurance premiums on Insurance Policy No.
747411;
4. Sotero did not sign the July 3, 1993 application for insurance; and
5. Respondent was the one who filed the insurance application, and

x x x designated herself as the beneficiary. For the above reasons, petitioner denied respondent’s claim
on April 16, 1997 and refunded the premiums paid on the policy.

ISSUE:

Whether or not Manila Bankers is barred from denying the insurance claims based on fraud or
concealment.

HELD:

YES. The “incontestability clause” is a provision in law that after a policy of life insurance made payable
on the death of the insured shall have been in force during the lifetime of the insured for a period of two

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2018 PRE BAR POINTS TO PONDER IN COMMERCIAL LAW,
From the Ponencias of Associate Justice MARIANO DEL CASTILLO,
Chairperson, 2018 Bar Examinations
PROF. E.H. BALMES
 JURISTS BAR REVIEW CENTER™
THESE NOTES ARE MEANT TO BE SHARED,
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(2) years from the date of its issue or of its last reinstatement, the insurer cannot prove that the policy
is void ab initio or is rescindible by reason of fraudulent concealment or misrepresentation of the insured
or his agent.

The purpose of the law is to give protection to the insured or his beneficiary by limiting the rescinding of
the contract of insurance on the ground of fraudulent concealment or misrepresentation to a period of only
two (2) years from the issuance of the policy or its last reinstatement.

The insurer is deemed to have the necessary facilities to discover such fraudulent concealment or
misrepresentation within a period of two (2) years. It is not fair for the insurer to collect the premiums as
long as the insured is still alive, only to raise the issue of fraudulent concealment or misrepresentation
when the insured dies in order to defeat the right of the beneficiary to recover under the policy.

Section 48 serves a noble purpose, as it regulates the actions of both the insurer and the insured. Under the
provision, an insurer is given two years – from the effectivity of a life insurance contract and while the
insured is alive – to discover or prove that the policy is void ab initio or is rescindible by reason of the
fraudulent concealment or misrepresentation of the insured or his agent. After the two-year period lapses,
or when the insured dies within the period, the insurer must make good on the policy, even though the
policy was obtained by fraud, concealment, or misrepresentation. This is not to say that insurance fraud
must be rewarded, but that insurers who recklessly and indiscriminately solicit and obtain business must
be penalized, for such recklessness and lack of discrimination ultimately work to the detriment of bona
fide takers of insurance and the public in general.

ASIAN TERMINALS, INC. vs. MALAYAN INSURANCE CO., INC.

G.R. No. 171406 April 4, 2011

FACTS:
On November 14, 1995, Shandong Weifang Soda Ash Plant shipped on board the vessel MV Jinlian I
60,000 plastic bags os soda ash dense from China to Manila. The shipment was insured with Respondent
Malayan Insurance Company, Inc. Under Marine Risk Note No. RN-001-21430 and covered by a Bill of
Lading issued by Tianjin Navigation Company with Philippine Banking Corporation as the consignee and
Chemphil Albright and Wilson Corporation as the notify party.

On November 21, 1995, upon arrival of the vessel, the stevedores of petitioner Asian Terminals, Inc.,
unloaded the 60,000 bags of soda ash dense from the vessel and brought them to the petitioner's open
storage area for temporary storage pending the clearance from the Bureau of Customs and delivery to the
consignee. Upon completion of the unloading of the bags, some 2,702 of them were found to be in bad
order condition. On december 28, 1995, after all the bags were unloaded in the warehouses of the
consignee, a total of 2,881 bags were found to be in bad order condition. On April 19, 1996, respondent,
as insurer, paid the value of the damaged bags amounting to P643,600.25.

The Respondent, as subrogee filed a coplaint for damages against the petitioner for the damaged bags
before the RTC. On Nune 26, 1998, the RTC rendered a Decision finding ther petitioner liable for
damages stating that the negligent acts of petitioner's stevedores were the proximate cause for the damage
caused on the bags. Citing the Civil Code provision of Art. 2176 in relation to Art. 2180 par 4 it held
petitioners liable for damages.

ISSUE:

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2018 PRE BAR POINTS TO PONDER IN COMMERCIAL LAW,
From the Ponencias of Associate Justice MARIANO DEL CASTILLO,
Chairperson, 2018 Bar Examinations
PROF. E.H. BALMES
 JURISTS BAR REVIEW CENTER™
THESE NOTES ARE MEANT TO BE SHARED,
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Whether or not the non-presentment of the insurance contract is fatal to respondent's cause of action?

HELD:

NO, the non-presentment of the insurance contract is not fatal to respondent's cause of action.

First of all, this was never raised as an issue before the RTC. In fact, it is not among the issues agreed
upon by the parties to be resolved during the pre-trial. As we have said, the determination of issues during
the pre-trial conference bars the consideration of other questions, whether during trial or on appeal. Thus
the parties must disclose during pre-trial all issues they intend to raise during the trial, except those
involving privileged or impeaching matters. The basis of the rule is simple. Petitioners are bound by the
delimitation of the issues during the pre-trial because they themselves agreed to the same.

Neither was this issue raised on appeal. Basic is the rule that issues or grounds not raised below cannot be
resolved on review by the Supreme Court, for to allow the parties to raise new issues is antithetical to the
sporting idea of fair play, justice and due process

Besides, non presentation of the insurance contract or policy is not necessarily fatal. In Delsan Transport
Lines, Inc. v. Court of Appeals, we ruled that:

Anent the second issue, it is our view and so hold that the presentation in evidence of the marine
insurance policy is not indispensable in this case before the insurer may recover from the common
carrier the insured value of the lost cargo in the exercise of its subrogatory right. The subrogation
receipt, by itself, is sufficient to establish not only the relationship of herein private respondent as
insurer and Caltex, as the assured shipper of the lost cargo of industrial fuel oil, but also the
amount paid to settle the insurance claim. The right of subrogation accrues simply upon payment
by the insurance company of the insurance claim.

The presentation of the insurance policy was necessary in the case of Home Insurance Corporation v. CA
(a case cited by petitioner) because the shipment therein passed through several stages with different
parties involved in each stage. First, from the shipper to the port of departure; second, from the port of
departure to the M/S Oriental Statesman; third, from the M/S Oriental Statesman to the M/S Pacific
Conveyor; fourth, from the M/S Pacific Conveyor to the port of arrival; fifth, from the port of arrival to
the arrastre operator; sixth, from the arrastre operator to the hauler, Mabuhay Brokerage Co., Inc. (private
respondent therein); and lastly, from the hauler to the consignee. We emphasized in that case that in the
absence of proof of stipulations to the contrary, the hauler can be liable only for any damage that occurred
from the time it received the cargo until it finally delivered it to the consignee. Ordinarily, it cannot be
held responsible for the handling of the cargo before it actually received it. The insurance contract, which
was not presented in evidence in that case would have indicated the scope of the insurers liability, if any,
since no evidence was adduced indicating at what stage in the handling process the damage to the cargo
was sustained.

In International Container Terminal Services, Inc. v. FGU Insurance Corporation, we used the same line
of reasoning in upholding the Decision of the CA finding the arrastre contractor liable for the lost
shipment despite the failure of the insurance company to offer in evidence the insurance contract or
policy. We explained:

Indeed, jurisprudence has it that the marine insurance policy needs to be presented in evidence before the
trial court or even belatedly before the appellate court. In Malayan Insurance Co., Inc. v. Regis Brokerage
Corp., the Court stated that the presentation of the marine insurance policy was necessary, as the issues

8
2018 PRE BAR POINTS TO PONDER IN COMMERCIAL LAW,
From the Ponencias of Associate Justice MARIANO DEL CASTILLO,
Chairperson, 2018 Bar Examinations
PROF. E.H. BALMES
 JURISTS BAR REVIEW CENTER™
THESE NOTES ARE MEANT TO BE SHARED,
SHARING THEM IS A GOOD KARMA WAITING TO HAPPEN

raised therein arose from the very existence of an insurance contract between Malayan Insurance and its
consignee, ABB Koppel, even prior to the loss of the shipment. In Wallem Philippines Shipping, Inc. v.
Prudential Guarantee and Assurance, Inc., the Court ruled that the insurance contract must be presented in
evidence in order to determine the extent of the coverage. This was also the ruling of the Court in Home
Insurance Corporation v. Court of Appeals.

However, as in every general rule, there are admitted exceptions. In Delsan Transport Lines, Inc. v. Court
of Appeals, the Court stated that the presentation of the insurance policy was not fatal because the loss of
the cargo undoubtedly occurred while on board the petitioner's vessel, unlike in Home Insurance in which
the cargo passed through several stages with different parties and it could not be determined when the
damage to the cargo occurred, such that the insurer should be liable for it.

As in Delsan, there is no doubt that the loss of the cargo in the present case occurred while in petitioner's
custody. Moreover, there is no issue as regards the provisions of Marine Open Policy No. MOP-12763,
such that the presentation of the contract itself is necessary for perusal, not to mention that its existence
was already admitted by petitioner in open court. And even though it was not offered in evidence, it still
can be considered by the court as long as they have been properly identified by testimony duly recorded
and they have themselves been incorporated in the records of the case.

Similarly, in this case, the presentation of the insurance contract or policy was not necessary. Although
petitioner objected to the admission of the Subrogation Receipt in its Comment to respondent's formal
offer of evidence on the ground that respondent failed to present the insurance contract or policy, a
perusal of petitioners Answer and Pre-Trial Brief shows that petitioner never questioned respondents right
to subrogation, nor did it dispute the coverage of the insurance contract or policy. Since there was no issue
regarding the validity of the insurance contract or policy, or any provision thereof, respondent had no
reason to present the insurance contract or policy as evidence during the trial.

NO HONEST EFFORTS ARE EVER WASTED!

GOOD LUCK AND GOD BLESS


ALL RIGHTS RESERVED
Batangas City and Manila
2018

All for the Greater Glory of GOD!

AMDG

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2018 PRE BAR POINTS TO PONDER IN COMMERCIAL LAW,
From the Ponencias of Associate Justice MARIANO DEL CASTILLO,
Chairperson, 2018 Bar Examinations
PROF. E.H. BALMES