insurance case
DESCRIPTION
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Mayer Steel Pipe vs. CA
273 SCRA 432 (1997)
• INSURANCE LAW: Contract of Insurance
FACTS:
Hong Kong Government Supplies Department contracted Mayer Steel Pipe Corporation to manufacture and supply various steel pipes and fittings. Prior to the shipping, Mayer insured these pipes and fittings against all risks with South Sea Surety and Insurance Co., Inc. and Charter Insurance Corp., with Industrial Inspection Inc. appointed as third-party inspector.
After examining the pipes and fittings, Industrial Inspection certified that they are in good order condition. However, when the goods reached Hong Kong, it was discovered that a substantial portion thereof was damaged.
The trial court found in favor of the insured. However, when the case was elevated to the CA, it set aside the decision of the trial court and dismissed the complaint on the ground of prescription. It held that the action was barred under Sec. 3(6) of the Carriage of Goods by Sea Act (COGSA) since it was filed only on April 17, 1986, more than two years from the time the goods were unloaded from the vessel.
ISSUE:
• Whether or not the action is barred by prescription
HELD:
Sec. 3(6) of the COGSA states that the carrier and the ship shall be discharged from all liability for loss or damage to the goods if no suit is filed within one year after delivery of the goods or the date when they should have been delivered. Under this provision, only the carrier’s liability is extinguished if no suit is
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brought within one year. But the liability of the insurer is not extinguished because the insurer’s liability is based not on the contract of carriage but on the contract ofinsurance.
An insurance contract is a contract whereby one party, for a consideration known as the premium, agrees to indemnify another for loss or damage which he may suffer from a specified peril. An “all risks” insurance policy covers all kinds of loss other than those due to willful and fraudulent act of the insured. Thus, when private respondents issued the “all risks” policies to Mayer, they bound themselves to indemnify the latter in case of loss or damage to the goods insured. Such obligation prescribes in ten years, in accordance with Article 1144 of the New Civil Code.
Insurance Case Digest: Guingon V. Del Monte, 20 SCRA 1043 (1967)
G.R. No. L-22042 August 17, 1967
Lessons Applicable: Stipulation Pour Autrui (Insurance)
FACTS:
Julio Aguilar owner and operator of several jeepneys insured them
with Capital Insurance & Surety Co., Inc.
February 20, 1961: Along the intersection of Juan Luna and Moro streets, City of
Manila, the jeepneys operated by Aguilar driven by Iluminado del
Monte and Gervacio Guingon bumped and Guingon died some days after
Iluminado del Monte was charged with homicide thru reckless imprudence and
was penalized 4 months imprisonment
The heirs of Gervacio Guingon filed an action for damages praying that
P82,771.80 be paid to them jointly and severally by thedriver del Monte, owner
and operator Aguilar, and the CapitalInsurance & Surety Co., Inc.
CFI: Iluminado del Monte and Julio Aguilar jointly and severally to pay plaintiffs
the sum of P8,572.95 as damages for the death of their father, plus P1,000.00
for attorney's fees plus costs
Capital Insurance and Surety Co., Inc. is hereby sentenced to
pay P5,000 plus P500 as attorney's fees and costs to be applied in partial
satisfaction of the judgment rendered against Iluminado del Monte and Julio
Aguilar in this case
ISSUE:
1. W/N there a stipulation pour autriu to enable that will enable the heirs to sue
against Capital Insurance and Surety Co., Inc.? - YES
2. W/N the heirs can sue the insurer and insured jointly? - YES
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HELD: Affirmed in toto.
1. YES
policy: the insurer agreed to indemnify the insured "against all sums . . . which
the Insured shall become legally liable to pay in respect of: a. death of or bodily
injury to any person . . . ." - indemnity against liability
TEST: Where the contract provides for indemnity against liability to third
persons, then third persons to whom the insured is liable, CAN sue the
insurer. Where the contract is for indemnity against actual loss or payment, then
third persons CANNOT proceed against the insurer, the contract being solely to
reimburse the insured for liability actually discharged by him thru payment to
third persons, said third persons' recourse being thus limited to the insured
alone.
2. YES
policy: expressly disallows suing the insurer as a co-defendant of the insured in
a suit to determine the latter's liability
no action close: suit and final judgment be first obtained against the insured;
that only "thereafter" can the person injured recover on the policy
Sec. 5 of Rule 2 on "Joinder of causes of action" and Sec. 6 of Rule 3 on
"Permissive joinder of parties" cannot be superseded, at least with respect to
third persons not a party to the contract, as herein, by a "no action" clause in
the contract of insurance.
Bonifacio Bros. v. Mora
20 SCRA 262
Facts:
> Enrique Mora mortgaged his Odlsmobile sedan car to HS Reyes Inc. with the condition that Mora would insure the car with HS Reyes as beneficiary.> The car was then insured with State Insurance Company and the policy delivered to Mora.
> During the effectivity of the insurance contract, the car figured in an accident. The company then assigned the accident to an insurance appraiser for investigation and appraisal of the damage.
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> Mora without the knowledge and consent of HS Reyes, authorized Bonifacio Bros to fix the car, using materials supplied by the Ayala Auto Parts Company.
> For the cost of Labor and materials, Mora was billed P2,102.73. The bill was sent to the insurer’s appraiser. The insurance company drew a check in the amount of the insurance proceeds and entrusted the check to its appraiser for delivery to the proper party.
> The car was delivered to Mora without the consent of HS Reyes, and without payment to Bonifacio Bros and Ayala.
> Upon the theory that the insurance proceeds should be directly paid to them, Bonifacio and Ayala filed a complaint against Mora and the insurer with the municipal court for the collection of P2,102.73.
> The insurance company filed its answer with a counterclaim for interpleader, requiring Bonifacio and HS Reyes to interplead in order to determine who has a better right to the proceeds.
Issue:
Whether or not there is privity of contract between Bonficacio and Ayala on one hand and State Insurance on the other.
Held:
NONE.
It is fundamental that contracts take effect only between the parties thereto, except in some specific instance provided by law where the contract contains some stipulation in favor of a third person. Such stipulation is known as a stipulation pour autrui; or a provision in favor of a third person not a party to the contract.
Under this doctrine, a third person is ed to avail himself of a benefit granted to him by the terms of the contract, provided that the contracting parties have clearly and deliberately conferred a favor upon such person. Consequently, a third person NOT a party to the contract has NO action against the aprties thereto, and cannot generally demand the enforcement of the same.
The question of whether a third person has an enforceable interest in a contract must be settled by determining whether the contracting parties intended to tender him such an interest by deliberately inserting terms in their agreement with the avowed purpose of conferring favor upon such third person. IN this connection, this court has laid down the rule that the fairest test to determine whether the interest of a 3rdperson in a contract is a stipulation pour autrui or merely an incidental interest, is to rely upon the intention of the parties as disclosed by their contract.
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In the instant case the insurance contract does not contain any words or clauses to disclose an intent to give any benefit to any repairmen or material men in case of repair of the car in question. The parties to the insurance contract omitted such stipulation, which is a circumstance that supports the said conclusion. On the other hand, the "loss payable" clause of the insurance policy stipulates that "Loss, if any, is payable to H.S. Reyes, Inc." indicating that it was only the H.S. Reyes, Inc. which they intended to benefit.
A policy of insurance is a distinct and independent contract between the insured and insurer, and third persons have no right either in a court of equity, or in a court of law, to the proceeds of it, unless there be some contract of trust, expressed or implied, by the insured and third person. In this case, no contract of trust, express or implied. In this case, no contract of trust, expressed or implied exists. We, therefore, agree with the trial court that no cause of action exists in favor of the appellants in so far as the proceeds of insurance are concerned. The appellant's claim, if at all, is merely equitable in nature and must be made effective through Enrique Mora who entered into a contract with the Bonifacio Bros Inc. This conclusion is deducible not only from the principle governing the operation and effect of insurance contracts in general, but is clearly covered by the express provisions of section 50 of the Insurance Act (now Sec. 53).
The policy in question has been so framed that "Loss, if any, is payable to H. S. Reyes, Inc." which unmistakably shows the intention of the parties.
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FINMAN GENERAL ASSURANCE CORPORATION vs. THE HONORABLE COURT OF APPEALS
FINMAN GENERAL ASSURANCE CORPORATION vs. THE HONORABLE COURT OF APPEALS 213 SCRA 493, September 2, 1992 NOCON, J.:
FACTS:
On October 22, 1986, deceased, Carlie Surposa was insured with petitioner Finman General Assurance Corporation with his parents, spouses Julia and Carlos Surposa, and brothers Christopher, Charles, Chester and Clifton, all surnamed, Surposa, as beneficiaries. While said insurance policy was in full force and effect, the insured, Carlie Surposa, died on October 18, 1988 as a result of a stab wound inflicted by one of the three (3) unidentified men. Private respondent and the other beneficiaries of said insurance policy filed a written notice of claim with the petitioner insurance company which denied said claim contending that murder and assault are not within the scope of the coverage of the insurance policy. Private respondent filed a complaint with the Insurance Commission which rendered a favorable response for the respondent. The appellate court ruled likewise. Petitioner filed this petition alleging grave abuse of discretion on the part of the appellate court in applying the principle of "expresso unius exclusio alterius" in a personal accident insurance policy, since death resulting from murder and/or assault are impliedly excluded in said insurance policy considering that the cause of death of the insured was not accidental but rather a deliberate and intentional act of the assailant. Therefore, said death was committed with deliberate intent which, by the very nature of a personal accident insurance policy, cannot be indemnified.
ISSUE: Whether or not the insurer is liable for the payment of the insurance premiums
HELD:
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Yes, the insurer is still liable. Contracts of insurance are to be construed liberally in favor of the insured and strictly against the insurer. Thus ambiguity in the words of an insurance contract should be interpreted in favor of its beneficiary. The terms "accident" and "accidental" as used in insurance contracts have not acquired any technical meaning, and are construed by the courts in their ordinary and common acceptation. Thus, the terms have been taken to mean that which happen by chance or fortuitously, without intention and design, and which is unexpected, unusual, and unforeseen. Where the death or injury is not the natural or probable result of the insured's voluntary act, or if something unforeseen occurs in the doing of the act which produces the injury, the resulting death is within the protection of the policies insuring against death or injury from accident. In the case at bar, it cannot be pretended that Carlie Surposa died in the course of an assault or murder as a result of his voluntary act considering the very nature of these crimes. Neither can it be said that where was a capricious desire on the part of the accused to expose his life to danger considering that he was just going home after attending a festival. Furthermore, the personal accident insurance policy involved herein specifically enumerated only ten (10) circumstances wherein no liability attaches to petitioner insurance company for any injury, disability or loss suffered by the insured as a result of any of the stimulated causes. The principle of " expresso unius exclusio alterius" — the mention of one thing implies the exclusion of another thing — is therefore applicable in the instant case since murder and assault, not having been expressly included in the enumeration of the circumstances that would negate liability in said insurance policy cannot be considered by implication to discharge the petitioner insurance company from liability for, any injury, disability or loss suffered by the insured. Thus, the failure of the petitioner insurance company to include death resulting from murder or assault among the prohibited risks leads inevitably to the conclusion that it did not intend to limit or exempt itself from liability for such death.
Sun v CA G.R. No. 89741 March 13, 1991
J. Paras
Facts:
Tan took from Sun Insurance a Php 300,000 policy to cover his electrical store in Iloilo city. Tan’s request for an indemnity in 1983 was repeatedly denied, firstly in 1984. He wrote for a reconsideration in the same year. This was rejected in 1985, prompting him to file a civil case in the same year. The insurance company filed a motion to dismiss due to prescription in 1987, but this was denied. The company went to the court of appeals to petition the same thing, but this was denied.
Issue:
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1. WON the filing of a motion for reconsideration interrupts the twelve months prescriptive period to contest the denial ofthe insurance claim.
2. WON the rejection of the claim shall be deemed final only if it contains words to the effect that denial is final. (ie. the first letter in 1984)
3. When does the cause of action accrue?
Held:
1.No
2.No
3. At the time of the first rejection of the insurance company
Ratio:
1. The policy states in section 27.
Action or suit clause — If a claim be made and rejected and an action or suit be not commenced either in the InsuranceCommission or in any court of competent jurisdiction within twelve (12) months from receipt of notice of such rejection, or in case of arbitration taking place as provided herein, within twelve (12) months after due notice of the award made by the arbitrator or arbitrators or umpire, then the claim shall for all purposes be deemed to have been abandoned and shall not thereafter be recoverable hereunder.
Respondent Tan admitted that he received a copy of the letter of rejection on April 2, 1984. Thus, the 12-month prescriptive period started to run from the said date of April 2, 1984, under section 27.
2. It was clear in the letter.
Ang v. Fulton Fire Insurance Co.- The condition contained in an insurance policy that claims must be presented within one year after rejection is not merely a procedural requirement but an important matter essential to a prompt settlement of claims against insurance companies as it demands that insurance suits be brought by the insured while the evidence as to the origin and cause of destruction have not yet disappeared.
Therefore, there was a necessity of bringing suits against the Insurer within one year from the rejection of the claim. (1984) The contention of the respondents that the one-year prescriptive period does not start to run until the petition for reconsideration had been resolved by the insurer (1985), runs counter to the doctrine.
The provision in the contract was pursuant to Sec. 63.
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A condition, stipulation or agreement in any policy of insurance, limiting the time for commencing an action thereunder to a period of less than one year from the time when the cause of action accrues, is void.
3. Eagle star- The right of the insured to the payment of his loss accrues from the happening of the loss. However, the cause of action in an insurance contract does not accrue until the insured's claim is finally rejected by the insurer. This is because before such final rejection there is no real necessity for bringing suit.
The cause of action, then, started when the insurer denied his claim in the first instance(1984). This rejection of a petition for reconsideration as insisted by respondents wasn’t the beginning of the cause of action.
Insurance Case Digest: Gallardo V. Morales (1960)
G.R. No. L-12189 April 29, 1960
Lessons Applicable: Definition and Coverage of Life Insurance (Insurance)
Laws Applicable: Rule 39, section 12, subdivision (k) of the Rules of Court (old law)
FACTS:
CFI: Hermenegilda S. Morales to pay P7,000 to a creditor Francisca Gallardo
writ of execution was issued and delivered to the Sheriff who garnished and
levied execution on the sum of P7,000 out of the P30,000 due from the
Capital Insurance & Surety Co. Inc., to Morales as beneficiary whose
husband Luis Morales died by assassination.
Morales asked the sheriff to quash and lift said garnishment or levy on execution
invoking Rule 39, section 12, subdivision (k) of the Rules of Court but it was
denied.
All moneys, benefits, privileges, or annuities accruing or in any manner growing
out of any life insurance, if the annual premiums paid do not exceed five
hundred pesos, and if they exceed that sum a like exemption shall exist which
shall bear the same proportion to the moneys, benefits, privileges, and annuities
so accruing or growing out of such insurance that said five hundred pesos bears
to the whole annual premiums paid.
Morales appealed maintaining that it was a life insurance for it insured her
husband for injuries and/or death as a result of murder or assault or attempt
thereat
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ISSUE: W/N the insurance is a life insurance and not an accident insurance
HELD: NO. order appealed from is reversed, and the garnishment in dispute hereby
set aside and quashed
the annual premium was for P15
If it were an ordinary life insurance policy, taking into account that the insured,
Luis G. Morales, was 38 years of age and the amount of the policy was for
P50,000.00 the annual premium would have been around P1,206
the period for the policy was stipulated for one year, and considerations as to
age, health, occupation and other personal circumstances were not taken into
account in an accident insurancepolicy
Annex "1" of the opposition, shows that the Capital Insurance and Surety
Company Inc. is a non-life insurance company and that the only authority
granted to it to transact business covers fire, marine, surety, fidelity, accident,
motor car, and miscellaneous insurance, except life insurance
Accident vs Life Insurance Policy
accident policy - merely insures the person from injury and or death resulting
from murder, assault, or an attempt thereat
Accident insurance
indemnity or casualty contract
life insurance policy - what is insured is the life of the subject for a definite
number of years
life insurance
investment contract
contract by which the insurer, for a stipulated sum, engages to pay a certain
amount of money if another dies within the time limited by the policy
contract for insurance for one year in consideration of an advanced premium,
with the right of assured to continue it from year to year upon payment of a
premium as stipulated
includes accident insurance, since life is insured under either contract
includes all policies of insurance in which payment of insurance money is
contingent upon loss of life
"any life insurance"
applies to ordinary life insurance contracts, as well as to those which, although
intended primarily to indemnify for risks arising from accident, likewise, insure
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against loss of life due, either to accidental causes, or to the willful and criminal
act of another, which, as such, is not strictly accidental in nature
statutes of this nature seek to enable the head of the family to secure his widow
and children from becoming a burden upon the community and, accordingly,
should merit a liberal interpretation
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Insurance Case Digest: De La Cruz V. Capital Ins. & Surety Co, Inc. (1966)
G.R. No. L-21574 June 30, 1966
Lessons Applicable: Liability of Insurer for Suicide and Accidental Death (Insurance)
Laws Applicable:
FACTS:
Eduardo de la Cruz, employed as a mucker in the Itogon-Suyoc Mines, Inc. in
Baguio, was the holder of an accident insurancepolicy "against death or
disability caused by accidental means"
January 1, 1957: For the celebration of the New Year, the Itogon-Suyoc Mines,
Inc. sponsored a boxing contest for general entertainment wherein Eduardo, a
non-professional boxer participated
In the course of his bout with another non-professional boxer of the same height,
weight, and size, Eduardo slipped and was hit by his opponent on the left part of
the back of the head, causing Eduardo to fall, with his head hitting the rope
of the ring
He was brought to the Baguio General Hospital the following day. He died due
to hemorrhage, intracranial.
Simon de la Cruz, the father of the insured and who was named beneficiary
under the policy, thereupon filed a claim with the insurance company
The Capital Insurance and Surety co., inc denied stating that the death caused
by his participation in a boxing contest was not accidental
RTC: favored Simon
ISSUE: W/N the cause of death was accident
HELD:YES.
Eduardo slipped, which was unintentional
The terms "accident" and "accidental"
as used in insurance contracts, have not acquired any technical meaning and
are construed by the courts in their ordinary and common acceptation
happen by chance or fortuitously, without intention and design, and which is
unexpected, unusual, and unforeseen
event that takes place without one's foresight or expectation
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event that proceeds from an unknown cause, or is an unusual effect of a known
cause and, therefore, not expected
where the death or injury is not the natural or probable result of the insured's
voluntary act, or if something unforeseen occurs in the doing of the act which
produces the injury, the resulting death is within the protection of policies
insuring against death or injury from accident
while the participation of the insured in the boxing contest is voluntary, the
injury was sustained when he slid, giving occasion to the infliction by his
opponent of the blow that threw him to the ropes of the ring is not
The fact that boxing is attended with some risks of external injuries does not
make any injuries received in the course of the game not accidental
In boxing as in other equally physically rigorous sports, such as basketball or
baseball, death is not ordinarily anticipated to result. If, therefore, it ever does,
the injury or death can only be accidental or produced by some unforeseen
happening or event as what occurred in this case
Furthermore, the policy involved herein specifically excluded from its coverage
—
(e) Death or disablement consequent upon the Insured engaging in football,
hunting, pigsticking, steeplechasing, polo-playing, racing of any kind,
mountaineering, or motorcycling.
Death or disablement resulting from engagement in boxing contests was not
declared outside of the protection of the insurance contract
Insurance Case Digest: Guingon V. Del Monte, 20 SCRA 1043 (1967)
G.R. No. L-22042 August 17, 1967
Lessons Applicable: Stipulation Pour Autrui (Insurance)
FACTS:
Julio Aguilar owner and operator of several jeepneys insured them with Capital
Insurance & Surety Co., Inc.
February 20, 1961: Along the intersection of Juan Luna and Moro streets, City of
Manila, the jeepneys operated by Aguilar driven by Iluminado del
Monte and Gervacio Guingon bumped and Guingon died some days after
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Iluminado del Monte was charged with homicide thru reckless imprudence and
was penalized 4 months imprisonment
The heirs of Gervacio Guingon filed an action for damages praying that
P82,771.80 be paid to them jointly and severally by the driver del Monte, owner
and operator Aguilar, and the Capital Insurance & Surety Co., Inc.
CFI: Iluminado del Monte and Julio Aguilar jointly and severally to pay plaintiffs
the sum of P8,572.95 as damages for the death of their father, plus P1,000.00
for attorney's fees plus costs
Capital Insurance and Surety Co., Inc. is hereby sentenced to
pay P5,000 plus P500 as attorney's fees and costs to be applied in partial
satisfaction of the judgment rendered against Iluminado del Monte and Julio
Aguilar in this case
ISSUE:
1. W/N there a stipulation pour autriu to enable that will enable the heirs to sue
against Capital Insurance and Surety Co., Inc.? - YES
2. W/N the heirs can sue the insurer and insured jointly? - YES
HELD: Affirmed in toto.
1. YES
policy: the insurer agreed to indemnify the insured "against all sums . . . which
the Insured shall become legally liable to pay in respect of: a. death of or bodily
injury to any person . . . ." - indemnity against liability
TEST: Where the contract provides for indemnity against liability to third
persons, then third persons to whom the insured is liable, CAN sue the
insurer. Where the contract is for indemnity against actual loss or payment, then
third persons CANNOT proceed against the insurer, the contract being solely to
reimburse the insured for liability actually discharged by him thru payment to
third persons, said third persons' recourse being thus limited to the insured
alone.
2. YES
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policy: expressly disallows suing the insurer as a co-defendant of the insured in
a suit to determine the latter's liability
no action close: suit and final judgment be first obtained against the insured;
that only "thereafter" can the person injured recover on the policy
Sec. 5 of Rule 2 on "Joinder of causes of action" and Sec. 6 of Rule 3 on
"Permissive joinder of parties" cannot be superseded, at least with respect to
third persons not a party to the contract, as herein, by a "no action" clause in
the contract of insurance.
Insurance Case Digest: Guingon V. Del Monte, 20 SCRA 1043 (1967)
G.R. No. L-22042 August 17, 1967
Lessons Applicable: Stipulation Pour Autrui (Insurance)
FACTS:
Julio Aguilar owner and operator of several jeepneys insured them with Capital
Insurance & Surety Co., Inc.
February 20, 1961: Along the intersection of Juan Luna and Moro streets, City of
Manila, the jeepneys operated by Aguilar driven by Iluminado del
Monte and Gervacio Guingon bumped and Guingon died some days after
Iluminado del Monte was charged with homicide thru reckless imprudence and
was penalized 4 months imprisonment
The heirs of Gervacio Guingon filed an action for damages praying that
P82,771.80 be paid to them jointly and severally by the driver del Monte, owner
and operator Aguilar, and the Capital Insurance & Surety Co., Inc.
CFI: Iluminado del Monte and Julio Aguilar jointly and severally to pay plaintiffs
the sum of P8,572.95 as damages for the death of their father, plus P1,000.00
for attorney's fees plus costs
Capital Insurance and Surety Co., Inc. is hereby sentenced to
pay P5,000 plus P500 as attorney's fees and costs to be applied in partial
satisfaction of the judgment rendered against Iluminado del Monte and Julio
Aguilar in this case
ISSUE:
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1. W/N there a stipulation pour autriu to enable that will enable the heirs to sue
against Capital Insurance and Surety Co., Inc.? - YES
2. W/N the heirs can sue the insurer and insured jointly? - YES
HELD: Affirmed in toto.
1. YES
policy: the insurer agreed to indemnify the insured "against all sums . . . which
the Insured shall become legally liable to pay in respect of: a. death of or bodily
injury to any person . . . ." - indemnity against liability
TEST: Where the contract provides for indemnity against liability to third
persons, then third persons to whom the insured is liable, CAN sue the
insurer. Where the contract is for indemnity against actual loss or payment, then
third persons CANNOT proceed against the insurer, the contract being solely to
reimburse the insured for liability actually discharged by him thru payment to
third persons, said third persons' recourse being thus limited to the insured
alone.
2. YES
policy: expressly disallows suing the insurer as a co-defendant of the insured in
a suit to determine the latter's liability
no action close: suit and final judgment be first obtained against the insured;
that only "thereafter" can the person injured recover on the policy
Sec. 5 of Rule 2 on "Joinder of causes of action" and Sec. 6 of Rule 3 on
"Permissive joinder of parties" cannot be superseded, at least with respect to
third persons not a party to the contract, as herein, by a "no action" clause in
the contract of insurance.