Ty vs. First National Surety, G.R. L-16138, April 29, 1961
Issue(s):
1.) Can injuries that prevent the appellant from performing his work or labor necessary in the pursuance of his occupation or business be equated with “loss of left hand” for the purpose of the latter claiming from his insurance policies?
Ruling:
The agreement contained in the insurance policies is the law between the parties. As the terms and conditions are clear, express and specific that only amputation of the left hand should be considered as a loss thereof, an interpretation that would include the mere fracture or other temporary disability not covered by the policies would certainly be unwarranted.
Summary of Ruling:
The court ruled in this manner because in the insurance policy of the petitioner there is no mention of mere injury short of amputation of the hand as equating with the definition of “loss of either hand” since in the policy itself it defines loss as: “…the loss a hand shall mean the loss by amputation through the bones of the wrist…”
The courts will only hazard an interpretation of such insurance policies if there is ambiguity with its provisions; in this case, the policy is clear on what is compensable, therefore the courts must apply the ordinary meaning of the provision, which is that the definition of loss is limited to amputation.
Commerical Law- Insurance Lesson:
An Insurance Policy is in effect a contract of adhesion, so where there is ambiguity or doubt the doubt should be resolved in favor of the party who merely adhered to the contract and against the party that who caused the obscurity.
This also would apply to restrictive provisions in the policy, where the provision is open to two or more interpretation that interpretation that is most beneficial to the insured shall be adopted. Any limitation to the liability must be construed in such a way as to preclude the insurer from non-compliance with its obligations (De leon, 2010)
Issue(s):
1.) Can injuries that prevent the appellant from performing his work or labor necessary in the pursuance of his occupation or business be equated with “loss of left hand” for the purpose of the latter claiming from his insurance policies?
Ruling:
The agreement contained in the insurance policies is the law between the parties. As the terms and conditions are clear, express and specific that only amputation of the left hand should be considered as a loss thereof, an interpretation that would include the mere fracture or other temporary disability not covered by the policies would certainly be unwarranted.
Summary of Ruling:
The court ruled in this manner because in the insurance policy of the petitioner there is no mention of mere injury short of amputation of the hand as equating with the definition of “loss of either hand” since in the policy itself it defines loss as: “…the loss a hand shall mean the loss by amputation through the bones of the wrist…”
The courts will only hazard an interpretation of such insurance policies if there is ambiguity with its provisions; in this case, the policy is clear on what is compensable, therefore the courts must apply the ordinary meaning of the provision, which is that the definition of loss is limited to amputation.
Commerical Law- Insurance Lesson:
An Insurance Policy is in effect a contract of adhesion, so where there is ambiguity or doubt the doubt should be resolved in favor of the party who merely adhered to the contract and against the party that who caused the obscurity.
This also would apply to restrictive provisions in the policy, where the provision is open to two or more interpretation that interpretation that is most beneficial to the insured shall be adopted. Any limitation to the liability must be construed in such a way as to preclude the insurer from non-compliance with its obligations (De leon, 2010)