Misamis v Capital Insurance GR L-21380 May 20, 1966

En Banc

Facts:
Misamis Lumber Company insured its Ford Falcon to Capital Insurance for P 14,000. One day, the car’s crank and flywheel broke when it passed over a water hole in Aurora Boulevard.  Misamis sent it to be repaired at the cost of 302 pesos. However, Capital did not want to pay the entire amount because the repair limit in the contract stipulated up to 150 pesos only.  Misamis filed suit.
The lower court ruled against the insurance corporation because the company did not show that the cost was excessive. Also , the court ruled that absolving the company of the excess amount would make the contract one sided.

Issue: Is the insurance company liable for more than the amount in the repair limit?

Held: No. Insurance company only ordered to pay 150 pesos.

Ratio:
Paragraph 4, subpar a. of the insurance contract is clear and specific. It authorizes up to 150 pesos only as a repair limit.
The lower court did not heed the express stipulation in the agreement.  The policy specifically noted the mechanics for repair in par. 2 and the limits of the liability in par 4. The company didn’t notify the insurance provider before it did the repairs. Also, even if the contract is onerous, this doesn’t justify its abrogation.