Del Rosario v Equitable G.R. No. L-16215 June 29, 1963

J. Paredes

Facts:

Equitable’s insurance policy covered indemnities for bodily injuries and deaths, however, it never specificed an amount to be given in case of a person’s death by drowning.  It specified amounts from 1,000 to 3,000 for other causes of death, however.

Francisico del Rosario died from drowning after jumping from a sinking ship. The insurer, Equitable, agreed to pay Php 1,000 as the claim for an accident. His attorney, howvever, contended that he amount should be greater under section 2, Php 1500. The issue was resolved in the Insurance Commison, where it was held that Section 1, under the provisions applied. (Php 1,000 as indemnity) The lawyer still didin’t agree and instituted a suit. The trail court held that the company had the discretion to pay from Php 1,000 to 3,000 for death by drowning since there was no fixed amount for this type of death. The amended decision ordered the company to pay Php 2,000

Issue: What should the amount be?

Held: Judgment affirmed. Still 2,000.

Ratio:

The interpretation of obscure stipulations in a contract should not favor the party who cause the obscurity.

“Ambigious terms in a policy are to be construed strictly against, the insurer, and liberally in favor of the insured for the payment of indemnity where forfeiture is involved. The company takes great care in the wording and has legal advisers who create the contracts to the benefit of the company.

Trial court ruling are well considered because they are supported by doctrines on insurance resolving cases against the party who caused the ambiguity in the wording of the contract’s terms. This was also due to the fact that the insured didn’t have much of a say in formulating the contract.