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  • Sun Insurance v. CA

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    shookt panboi
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    This case discusses the one-year prescriptive period for filing an insurance claim based on a contract. The Supreme Court ruled that: 1) The insured's cause of action and right to file a claim commences from the time of the insurer's denial of the claim, either expressly or impliedly. 2) For the plaintiff Emilio Tan, the one-year period began on April 2, 1984 when he received the letter rejecting his fire loss claim, not when he later requested reconsideration. 3) Allowing the prescriptive period to be suspended by requesting reconsideration could create uncertainty, so the rejection that starts the period is the initial denial, not any subsequent reconsideration process.

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    6. Sun Insurance v. CA

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    This case discusses the one-year prescriptive period for filing an insurance claim based on a contract. The Supreme Court ruled that: 1) The insured's cause of action and right to file a claim commences from the time of the insurer's denial of the claim, either expressly or impliedly. 2) For the plaintiff Emilio Tan, the one-year period began on April 2, 1984 when he received the letter rejecting his fire loss claim, not when he later requested reconsideration. 3) Allowing the prescriptive period to be suspended by requesting reconsideration could create uncertainty, so the rejection that starts the period is the initial denial, not any subsequent reconsideration process.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    54 views2 pages

    Sun Insurance v. CA

    Uploaded by

    shookt panboi
    This case discusses the one-year prescriptive period for filing an insurance claim based on a contract. The Supreme Court ruled that: 1) The insured's cause of action and right to file a claim commences from the time of the insurer's denial of the claim, either expressly or impliedly. 2) For the plaintiff Emilio Tan, the one-year period began on April 2, 1984 when he received the letter rejecting his fire loss claim, not when he later requested reconsideration. 3) Allowing the prescriptive period to be suspended by requesting reconsideration could create uncertainty, so the rejection that starts the period is the initial denial, not any subsequent reconsideration process.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    of 2

    SUN INSURANCE OFFICE, LTD. vs.

    COURT OF First, it is a cardinal principle of insurance law that a


    APPEALS and EMILIO TAN policy or contract of insurance is to be construed
    G.R. No. 89741 liberally in favor of the insured and strictly against the
    March 13, 1991 insurer company. However, if such terms are clear and
    unambiguous, they must be taken and understood in
    their plain, ordinary and popular sense.
    Digested by: Kristoper Laguting
    As the terms of section 27 of the insurance policy are
    very clear and free from any doubt or ambiguity
    Topic: whatsoever, it must be taken and understood in its
    plain, ordinary meaning.
    This case discusses about the period within which a
    party may file a case base on a claim arising from an In this case, Tan admitted that he received a copy of
    insurance contract and when such right to file or the the letter of rejection on April 2, 1984. Thus, the 12-
    cause of action commences or accrues. month prescriptive period started to run from the said
    date of April 2, 1984, for such is the plain meaning and
    FACTS: intention of Section 27 of the insurance policy.
    Emilio Tan took a property insurance policy from Sun Section 27 of the insurance policy was stipulated
    Insurance over his interest in an electrical supply pursuant to Section 63 of the Insurance Code, which
    store. 4 days after the issuance of the policy, a fire states that:
    burned down the store.
    Sec. 63. A condition, stipulation or agreement
    On August 20, 1983, Tan filed his claim for fire loss in any policy of insurance, limiting the time for
    with insurer, but on February 29, 1984, the insurer commencing an action thereunder to a period
    wrote Tan denying his claim. of less than one year from the time when the
    On April 3, 1984, Tan wrote to the insurer, seeking cause of action accrues, is void.
    reconsideration of the denial of his claim. So the question is “When does the cause of
    On September 3, 1985, Tan's counsel wrote the action accrue?”
    Insurer inquiring about the status of his April 3, 1984 Eagle Star Insurance Co. vs. Chia Yu (96 Phil. 696
    request for reconsideration. (1955]), where the Court held:
    The insurer answered the letter on October 11, 1985, The right of the insured to the payment of his
    advising Tan's counsel that the Insurer's denial of loss accrues from the happening of the loss.
    Tan's claim remained unchanged. Tan filed Civil Case However, the cause of action in an insurance
    against the insurer on November 20, 1985. (note contract does not accrue until the insured's
    that the case was filed more than 1 year from the time claim is finally rejected by the insurer. This is
    Tan receive a letter denying his claim on April 1984.) because before such final rejection there is no
    The insurer filed a motion to dismiss on the ground real necessity for bringing suit.
    that the action had already prescribed. ACCFA vs. Alpha Insurance & Surety Co., Inc. (24
    As provided in the Insurance policy, section 27 states SCRA 151 [1968], holding that:
    that: Since "cause of action" requires as essential
    27. Action or suit clause — If a claim be elements not only a legal right of the plaintiff
    made and rejected and an action or suit and a correlated obligation of the defendant in
    be not commenced either in the Insurance violation of the said legal right, the cause of
    Commission or in any court of competent action does not accrue until the party obligated
    jurisdiction within twelve (12) months (surety) refuses, expressly or impliedly, to
    from receipt of notice of such rejection, or comply with its duty (in this case to pay the
    in case of arbitration taking place as provided amount of the bond).
    herein, within twelve (12) months after due Based on the said pronouncements, the insured's
    notice of the award made by the arbitrator or cause of action or his right to file a claim commences
    arbitrators or umpire, then the claim shall from the time of the denial of his claim by the Insurer,
    for all purposes be deemed to have been either expressly or impliedly.
    abandoned and shall not thereafter be
    recoverable hereunder. The rejection referred to should be construed as the
    rejection in the first instance.
    Tan is contending that the one-year prescriptive period
    does not start to run until the petition for Otherwise, if the filing of a motion for reconsideration
    reconsideration had been resolved by the insurer. would suspend the running of the prescriptive period of
    twelve months, a whole new body of rules on the
    ISSUE: matter should be promulgated so as to avoid any
    Whether or not this case was filed beyond the one- conflict that may be brought by it.
    year prescriptive period. Also, the Court noted the rationale for the necessity of
    RULING: YES. bringing suits against the Insurer within one year from
    the rejection of the claim.
    In Ang v. Fulton Fire Insurance Co., the Court held
    that:
    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.

    Dispositive: Case dismissed.

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