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GOVERNMENT SERVICE INSURANCE SYSTEM v. CALABIA

FACTS:

National Food Authority (NFA) owned a Chevrolet truck that was insured with the Government Service Insurance System (GSIS). On May 9, 1979, the truck driven by Guillermo Corbeta collided with a Toyota Tamaraw owned and operated by Victor Uy. The collision resulted in the death of five passengers and injuries to ten others, including private respondents Victoria Jaime Vda. de Kho and Gloria Kho Vda. de Calabia. Civil cases were filed against NFA, Corbeta, Uy, and their insurers. The trial court found Corbeta's negligence as the proximate cause of the collision and awarded damages to the injured parties and the heirs of the deceased victims. The Court of Appeals affirmed the trial court's decision, and GSIS, NFA, and Uy filed motions for reconsideration, which were denied. Only GSIS filed a petition for review on certiorari before the Supreme Court, questioning its solidary liability and the failure to file an insurance claim within six months from the accident.

ISSUES:

  1. Whether the respondent court erred in holding GSIS solidarily liable with the negligent insured/owner-operator of the Chevrolet truck for damages awarded to private respondents which are beyond the limitations of the insurance policy and the Insurance Memorandum Circular No. 5-78.

  2. Whether the respondent court failed to consider that the private respondents have no cause of action against the petitioner, allegedly for failure of the victims to file an insurance claim within six (6) months from the date of the accident.

RULING:

  1. On Holding GSIS Solidarily Liable Beyond Policy Limits

    • The Court ruled that GSIS cannot be held solidarily liable with NFA beyond the limits stated in the insurance policy. The liability of GSIS is limited to the extent of the insurance contract and according to Compulsory Motor Vehicle Liability Insurance (CMVLI) law. GSIS's liability is direct but not solidary with NFA's liability, which is based on quasi-delict.

  2. On Filing of Insurance Claims within Six Months

    • The Court found that the private respondents had indeed filed a notice of loss with GSIS within the stipulated six-month period. Thus, GSIS's contention that it should not be liable due to an alleged lack of notice was rejected since the records showed that the notice was sent and the issue was not raised timely by GSIS during the trial.

PRINCIPLES:

  • Direct Liability of Insurers Injured parties or the heirs of deceased victims can directly sue the insurer within the policy limits and those required by law (Shafer vs. Judge, RTC of Olongapo City, Br. 75).

  • Compulsory Motor Vehicle Liability Insurance (CMVLI) Provides specific indemnities for death and injuries to give immediate relief to victims of vehicular accidents, regardless of the financial capacity of vehicle owners (Insurance Memorandum Circular No. 5-78).

  • Joint vs. Solidary Liability Liability arising from an insurance contract is direct but not solidary with the liability of the insured, which is based on tort (Article 2180, Civil Code).

  • Notification of Insurance Claim Any defense about delayed reporting of loss should be promptly raised to be considered. Failure to interpose defenses about notice of claim results in waiver of said defenses.

  • General Principle of Contractual Liability An insurer's liability is based strictly on the contract of insurance and cannot exceed specified limits unless explicitly stated.