Title Comm-Canonical-Doctrines.pdf ✅

U.P LAW BOC abon3298 COMMERCIAL LAW Page 1 of 20 abon3298 COMMERCIAL LAW CANONICAL DOCTRINES INSURANCE TOPIC DOCTRINE CITED IN CITING Business of insurance imbued with public interest The business of insurance is imbued with public interest. It is subject to regulation by the State, with respect not only to the relations between the insurer and the insured, but also to the internal affairs of insurance companies. Republic v. Del Monte Motors, Inc., G.R. No. 156956, October 9, 2006 AFP Mutual Benefit Association, Inc. v. NLRC, 334 Phil. 712, January 28, 1997; citing Insular Life Assurance Co., Ltd. v. NLRC, 179 SCRA 459, November 15, 1989. Nature of group insurance The coverage terms for group insurance are usually stated in a master agreement or policy that is issued by the insurer to a representative of the group or to an administrator of the insurance program, such as an employer. The employer acts as a functionary in the collection and payment of premiums and in performing related duties. Likewise falling within the ambit of administration of a group policy is the disbursement of insurance payments by the employer to the employees. Most policies, such as the one in this case, require an employee to pay a portion of the premium, which the employer deducts from wages while the remainder is paid by the employer. This is known as a contributory plan as compared to a non-contributory plan where the premiums are solely paid by the employer. Although the employer may be the titular or named insured, the insurance is actually related to the life and health of the employee. Indeed, the employee is in the position of a real party to the master policy, and even in a non-contributory plan, the payment by the employer of the entire premium is a part of the total compensation paid for the services of the employee. Indeed, the employee is in the position of a real party to the Commissioner of Internal Revenue v. Manila Bankers' Life Insurance, G.R. No. 169103, March 16, 2011 Pineda v. Court of Appeals, G.R. No. 105562, September 27, 1993

U.P LAW BOC abon3298 COMMERCIAL LAW Page 3 of 20 abon3298 at the time of loss. Here, the parties agreed to a payment by installment, but no actual payment was made. Thus, the third exception has no application in this case. The Makati Tuscany case also provided the fourth exception, that is, if the insurer has granted the insured a credit term for the payment of the premium, then the general rule may not apply. The fifth and last exception, taken from the UCPB case, is estoppel in instances when the insurer had consistently granted a credit term for the payment of premium despite full awareness of Section 77. The insurer cannot deny recovery by the insured by citing the general rule in Section 77, because the insured had relied in good faith on the credit term granted. Reinstatement of insurance policy discretionary on insurer The stipulation in a life insurance policy giving the insured the privilege to reinstate it upon written application does not give the insured absolute right to such reinstatement by the mere filing of an application. The insurer has the right to deny the reinstatement if it is not satisfied as to the insurability of the insured and if the latter does not pay all overdue premium and all other indebtedness to the insurer. After the death of the insured the insurance Company cannot be compelled to entertain an application for reinstatement of the policy because the conditions precedent to reinstatement can no longer be determined and satisfied. Lalican v. Insular Life Assurance Co. Ltd., G.R. No. 183526, August 25, 2009 McGuire v. Manufacturers Life Insurance Co., G.R. No. L-3581, September 21, 1950 Gross negligence by insured constitues willful act exonerating insurer The ordinary negligence of the insured and his agents has long been held as a part of the risk which the insurer takes upon himself, and the existence of which, where it is the proximate cause of the loss, does not absolve the insurer from liability. But willful exposure, gross negligence, negligence amounting to misconduct, etc.,have often been held to release the insurer from such liability. FGU Insurance Corp. v. Court of Appeals, G.R. Nos. 137775 & 140704, March 31, 2005
U.P LAW BOC abon3298 COMMERCIAL LAW Page 4 of 20 abon3298 PRE-NEED TOPIC DOCTRINE CITED IN CITING HMOs vs insurance companies The main difference between an HMO and an insurance company is that HMOs undertake to provide or arrange for the provision of medical services through participating physicians while insurance companies simply undertake to indemnify the insured for medical expenses incurred up to a pre-agreed limit. Medicard Philippines, Inc. v. CIR, G.R. No. 222743, April 5, 2017 Philippine Health Care Providers, Inc. v. CIR, G.R. No. 167330, September 18, 2009 TRANSPORTATION TOPIC DOCTRINE CITED IN CITING Definition of a public utility A "public utility" is "a business or service engaged in regularly supplying the public with some commodity or service of public consequence such as electricity, gas, water, transportation, telephone or telegraph service. The term "public utility" implies public use and service to the public Metropolitan Cebu Water District v. Adala, G.R. No. 168914, July 4, 2007 JG Summit Holdings v. Court of Appeals, G.R. No. 124293, September 24, 2003 Napocor v. Court of Appeals, G.R. Nos. 112702 &113613, September 26, 1997, citing Albano v. Reyes, G.R. No. 83551. July 11, 1989 Statues enacted for regulation of public utilities are retroactive Statutes enacted for the regulation of public utilities, being a proper exercise by the state of its police power, are applicable not only to those public utilities coming into existence after its passage, but likewise to those already established and in operation Radio Communications of the Philippines, Inc. v. National Telecommunica- tions Commission, G.R. No. L-68729, May 29, 1987 Cebu Transit Co., Inc. v. Public Service Commission, G.R. No. L-788, October 30, 1947 Pangasinan Transportation Co, Inc v. Public Service Commission, G.R. No. 47065. June 26, 1940 Power to issue a franchise, certificate or any form of authorization for operation of public utilities is not limited to the Congress That the issuance of a franchise, certificate or other form of authorization for the operation of a public utility shall be subject to amendment, alteration or repeal by Congress does not necessarily imply that only Congress has the power to grant such authorization Francisco, Jr. v. Toll Regulatory Board, G.R. Nos. 166910, 169917, 173630 & 183599, October 19, 2010 Albano v. Reyes, G.R. No. 83551. July 11, 1989 Franchises issued by Congress are not required Franchises issued by Congress are not required before each and every public utility may operate Francisco, Jr. v. Toll Regulatory Board, G.R. Nos. 166910, 169917, Albano v. Reyes, G.R. No. 83551. July 11, 1989