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[G.R. No.145023.February 28, 2001]
VISTA INSURANCE CORP. vs. CHARTER INSURANCE COMPANY, INC.
SECOND DIVISION
Gentlemen:
Quoted hereunder, for your information, is a resolution of this Court dated FEB 28 2001.
G.R. No. 145023( Vista Insurance Corporation vs. Charter Insurance Company, Inc.)
Petitioner Vista insurance Corporation and respondent Charter Insurance Company, Inc. are both engaged in the business of insurance. On June 9, 1977, they entered into a re-insurance agreement with each other whereby they agreed to re-insure or re-cover agreed portion/s or percentage/s of the insurance business or coverage solicited by either of them.
Sometime in 1983, respondent filed a case against petitioner, alleging that the latter had not remitted its (petitioner's) shares in the insurance premiums or paid its (petitioner's) part of the losses/damages paid by respondent to the assured on insurance coverage pursuant to the parties' re-insurance agreement. Petitioner denied it owed respondent an obligation and that even assuming otherwise, the same had already been paid and/or the cause of action had already prescribed.
On March 2, 1992, the trial court rendered judgment in favor of
respondent and ordered petitioner to pay respondent P158,572.36 with
legal interest per annum from April 5, 1983 until the same is fully paid, P10,000.00
as attorney's fees, and the costs. On appeal, the Court of Appeals affirmed the
trial court's decision. Hence this petition wherein petitioner raises the
following questions of law and of facts:
Questions of Law:
a) THE HONORABLE COURT OF APPEALS ERRED IN NOT DECLARING THAT "ASSUMPTION OF RISK BY A RE-INSURED IS A LEGAL PRE-REQUISITE TO HOLDING A RE-INSURER LIABLE UNDER A RE-INSURANCE TREATY."
b) THE HONORABLE COURT OF APPEALS ERRED IN NOT DECLARING THAT A VALID AND EFFECTIVE INSURANCE POLICY DULY ISSUED TO AN ASSURED COVERING A PARTICULAR RISK IS AN ESSENTIAL EVIDENCE TO PROVE CEDING OF A RE-INSURANCE BUSINESS.
c) THE HONORABLE COURT OF APPEALS ERRED IN NOT DECLARING THAT THE "USUAL RULES OF EVIDENCE IN CIVIL ACTIONS GENERALLY APPLY IN ACTIONS ON A RE-INSURANCE CONTRACT."
Questions of Fact: As an exception to the general rule, the following questions are raised on the ground that the Decision is not supported by evidence:
a) THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT THERE WERE RE-INSURANCE BUSINESSES ACTUALLY CEDED BY THE RESPONDENT TO THE PETITIONER IN THE ABSENCE [OF] EVIDENCE OR DOCUMENTS SHOWING THE CEDING OF RE-INSURANCE BUSINESSES TO PETITIONER.
b) THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING LIABILITY FOR RE-INSURANCE LOSSES WHEN NO PROOFS OF SUCH LOSSES AND PROOFS OF PAYMENT OF SUCH LOSSES WERE PRESENTED DURING TRIAL.
First: Petitioner argues that no re-insurance business was actually ceded by respondent to it as seen by the fact that the latter did not present any insurance policy that it issued and allegedly ceded to petitioner.
The existence of the re-insurance business between the parties had been adequately established by respondent. Even petitioner's own witness Mrs. Eden del Rosario admitted that the parties entered into the re-insurance business. Such is also evidenced by the Fire First Surplus Treaty signed by respondent's executive vice-president and petitioner's manager, Art. I of which expressly states:
The COMPANY [respondent] undertakes to cede to the RE-INSURER [petitioner] and the RE-INSURER agrees to accept by way of re-insurance the share indicated in Item I of the Schedule of the First Surplus after the retention of the COMPANY on all insurances and/or facultative re-insurances accepted or renewed by the Fire Department of the COMPANY against fire and accessory risks provided always the amounts so accepted by the RE-INSURER on any one risk shall at no time exceed its proportionate share of SIXTY (60) times the retention of the COMPANY; provided further that notwithstanding the foregoing, the maximum liability of the RE-INSURER shall at no time exceed its proportionate share of the amount shown in Item 2 of the Schedule.
Pursuant to this agreement, several statements of accounts were sent by respondent to petitioner which, as noted by the Court of Appeals, the latter did not deny.
Second. Petitioner also argues that it should not be held liable for re-insurance losses considering that respondent did not present any proof of such losses or of the fact of payment of such losses so that it cannot determine the veracity of respondent's claims.
The contention is without merit. The Fire First Surplus Treaty expressly provides:
ARTICLE XII
The accounts between the COMPANY and the RE-INSURER embracing the transactions under the present Agreement shall be rendered quarterly in Philippine Pesos by the COMPANY to the RE-INSURER within one (1) month after the close of each calendar quarter.
The RE-INSURER within fifteen (15) days of the receipt of the current accounts notify the COMPANY of the confirmation or non-confirmation thereof, but should no such notification be received the accounts shall be taken as confirmed. The balance on either side shall be due immediately on receipt of confirmation of the accounts or failing such confirmation, thirty (30) days after receipt by the RE-INSURER of the accounts.
All payments under this Agreement shall be made in Philippine Currency. (Emphasis added)
It is undisputed that petitioner failed to contest the statements of account sent to it by respondent within the required period of time such that under the agreement it is deemed to have agreed to the correctness thereof and to have dispensed with the presentation of proofs of loss/es.
As to petitioner's contention that respondent failed to show that it has actually assumed risks in favor of third persons for which it can hold petitioner liable, suffice it to say that this is an issue raised only for the first time in the present petition and thus cannot be considered without offending the dictates of fair play and due process (Sumbad v. Court of Appeals, 308 SCRA 575 (1999)). Besides, that respondent actually assumed the risks can be seen from the fact that it sustained losses for which it sought to hold petitioner liable.
In sum, petitioner has not adduced any reason for this Court to depart from the findings and conclusions of both the trial and the appellate courts.
WHEREFORE, the Court RESOLVED to NOTE respondent's comment to the instant petition for review and to DENY the aforesaid petition for failure to show that the Court of Appeals committed any reversible error.
Very truly yours,
(Sgd.) TOMASITA M. DRIS
Clerk of Court
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