The document discusses a case involving a bus accident where a pedestrian was struck. The insurer, Western Guaranty, argued that its liability was limited by the schedule of indemnities in the insurance policy. However, the court ruled that the schedule did not limit the types of damages covered and that Western Guaranty was liable for damages beyond what was in the schedule, such as loss of earnings and moral damages.
The document discusses a case involving a bus accident where a pedestrian was struck. The insurer, Western Guaranty, argued that its liability was limited by the schedule of indemnities in the insurance policy. However, the court ruled that the schedule did not limit the types of damages covered and that Western Guaranty was liable for damages beyond what was in the schedule, such as loss of earnings and moral damages.
The document discusses a case involving a bus accident where a pedestrian was struck. The insurer, Western Guaranty, argued that its liability was limited by the schedule of indemnities in the insurance policy. However, the court ruled that the schedule did not limit the types of damages covered and that Western Guaranty was liable for damages beyond what was in the schedule, such as loss of earnings and moral damages.
The document discusses a case involving a bus accident where a pedestrian was struck. The insurer, Western Guaranty, argued that its liability was limited by the schedule of indemnities in the insurance policy. However, the court ruled that the schedule did not limit the types of damages covered and that Western Guaranty was liable for damages beyond what was in the schedule, such as loss of earnings and moral damages.
Download as DOCX, PDF, TXT or read online from Scribd
Download as docx, pdf, or txt
You are on page 1/ 2
WESTERN GUARANTY CORP.
vs COURT OF APPEALS, RODRIGUEZ, and DE DIOS TRANSPORT G.R. No. 91666, July 20, 1990
FACTS:
While crossing the pedestrian lane, respondent Rodriguez was struck by a De Dios passenger bus owned by De Dios Transport and driven by Walter. She was thrown into the ground. She was hospitalized at Protacio Emergency Hospital and San Juan De Dios Hospital. As a result of the accident, he face was permanently disfigured which caused serious anxiety and moral distress.
De Dios Transport has an insurance policy with Western Guaranty for protection against third party liability which provided that the insurer’s total liability shall not exceed the limits of liability set forth in the policy. The policy also provided that in case of death or bodily injury to any third party or passenger, “the company’s payment per victim in any one accident shall not exceed the limits indicated in the Schedule of Indemnities provided for in this policy…”
Respondent Rodriguez filed a complaint for damages against De Dios Transport and driver Walter. De Dios Transport then filed a third-party complaint against Western.
The RTC ruled in favor of the respondent. On appeal, the CA affirmed in toto the RTC decision.
ISSUE/S:
Whether or not the CA erred in holding petitioner liable to pay beyond the limits set forth in the Schedule of Indemnities and in finding Western liable for loss of earnings, moral damages, and attorney’s fees.
RULING:
No. Western Guaranty failed to substantiate its contention.
Western argues that it cannot be held liable for such because these items are not included in the Schedule of Indemnities provided under the insurance policy.
In Section 1, entitled “Liability to the Public”, of the insurance policy, the events that generate liability on the part of the insurer in favor of a passenger or a third party are (1) death of, (2) bodily injury to, or (3) damage to the property of, the passenger or the third party.
It can be seen in their Schedule of Indemnities the monetary limits which Western may invoke in case of occurrence of the particular kinds of physical injury. The Court observes that the Schedule of Indemnities does not purport to limit, nor to enumerate exclusively the kinds of physical injuries that will generate liability against the insurer. There was no listing about internal injuries which are entirely possible in a car accident.
Western contends that the list they provided under the schedule is exclusive and any other injury not included in the list even if the 3 rd party actually suffered it should not make them liable to compensate such. Firstly, the Schedule of Indemnities does not purport to restrict nor limit the kinds of damages that may hold Western liable, it just limited the amount recoverable under these items to P50,000 per person per accident. With this, all kinds of damages allowable by law may be awarded by a competent court against the insurer once liability is shown to have arisen and its requisites are present. As correctly observed by CA, the schedule was merely meant to set limits to the amounts the movant would be liable for in cases of ‘claims for death, bodily injuries of, professional services and hospital charges, for services rendered to traffic accident victims,’ and not necessarily exclude claims against the insurance policy for other kinds of damages.
Secondly, the contention of Western, if allowed, will be a fraud upon both the insured and the third party because such view would limit the otherwise unlimited and comprehensive scope of liability assumed by insurer Western under Section 1 which expressly stated that “all sums necessary to discharge liability of the insured in respect of bodily injury to a third party”. Such view of Western is against public policy. If they really intend to exclude what they wanted to exclude, they should have chosen to use a language far more specific and precise than what was written in the policy.
It is well settled that contractual limitations of liability found in insurance contracts should be regarded by courts with a jaundiced eye and extreme care and should be construed as to preclude the insurer from evading compliance with its just obligations.
Thirdly, an insurance is a contract of adhesion. Doubts regarding the terms in the contract should be construed strictly against the party who prepared the contract.
The Travelers Indemnity Company of Hartford, Connecticut v. Mildred Yancey Wells, of The Estate of Willie Wells, Deceased, and Mildred Yancey Wells, 316 F.2d 770, 4th Cir. (1963)
