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PERLA COMPANIA DE SEGUROS v. CA

FACTS:

The case involves a petition for review on certiorari of the decision of the Court of Appeals affirming the decision of the Regional Trial Court (RTC) of Cavite. The petitioner, Milagros Cayas, was the registered owner of a Mazda bus which was insured with Perla Compania de Seguros, Inc. (PCSI). On December 17, 1978, the bus was involved in an accident injuring several passengers. One of the injured passengers, Edgardo Perea, filed a lawsuit against Milagros Cayas for damages.

Milagros Cayas failed to appear at the pre-trial and was declared in default. The court rendered a decision in favor of Perea, ordering Milagros Cayas to pay him damages. Milagros Cayas then filed a complaint against PCSI in the Office of the Insurance Commissioner, seeking payment for all the claims against her arising from the accident. She later withdrew the complaint.

Milagros Cayas then filed a complaint against PCSI in the RTC, seeking reimbursement for the amounts she paid to the other injured passengers and claiming moral damages. The court initially dismissed the case for failure to prosecute but later reconsidered and allowed it to proceed. The court eventually rendered a decision in favor of Milagros Cayas, ordering PCSI to pay her damages.

ISSUES:

  1. Whether or not Perla Compania de Seguros, Inc. (PCSI) is liable to pay Milagros Cayas the claims arising from the vehicular accident.

  2. Whether or not PCSI is liable for moral damages and attorney's fees.

RULING:

  1. The court held that PCSI is liable to pay Milagros Cayas the sum of P50,000.00 under its maximum liability as provided for in the insurance policy.

  2. The court also held that PCSI is liable to pay Milagros Cayas the sum of P5,000.00 as reasonable attorney's fees.

PRINCIPLES:

  • Insurance companies are liable to pay claims arising from accidents covered by the insurance policy.

  • Liability of an insurance company is determined by the terms of the insurance policy.

  • The insured is entitled to recover attorney's fees if the insurance company refuses to pay a valid claim.