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FIRST INTEGRATED BONDING v. HAROLD M. HERNANDO

FACTS:

This case involves a petition for certiorari filed by the petitioner seeking the annulment of the amended decision of the trial court in Civil Case No. 1104. The petitioner also filed a petition for relief from judgment, which was denied for being filed out of time.

The case originated from a complaint for damages filed by the Advincula spouses against Silverio Blanco, the owner of a passenger-jeepney, and First Integrated Bonding and Insurance Company, Inc. (First Insurance), as the insurer. The complaint was filed after Blanco's jeepney bumped and caused the death of the Advinculas' five-year-old child.

Blanco filed an answer to the complaint, while First Insurance was declared in default for failing to file a responsive pleading. During the pre-trial conference, the Advincula spouses presented various documentary evidence in support of their claim for damages.

The trial court rendered a decision on March 1, 1978, granting damages to the Advincula spouses. First Insurance received a copy of the decision on March 14, 1978. Subsequently, on March 27, 1978, the trial court issued an amended decision, granting additional damages to Blanco. First Insurance received a copy of the amended decision on April 11, 1978.

On May 11, 1978, the entry of judgment was made, and an order granting execution was issued on June 14, 1978. However, on September 5, 1978, First Insurance filed a petition for relief from judgment, which was subsequently denied on October 4, 1978.

ISSUES:

  1. Whether or not the Advincula spouses have a cause of action against First Insurance.

  2. Whether or not the trial court erred in abbreviating the proceedings and rendering judgment based on documentary evidence presented during the pre-trial conference.

  3. Whether or not First Insurance is liable in excess of the limits of liability as provided for in the policy contract.

  4. Whether the denial of the petition for relief from judgment by the respondent judge was proper.

  5. Whether the claim of the petitioner that its liability to third parties under the insurance policy is limited to P20,000.00 only can still be given consideration at this stage.

RULING:

  1. The Advincula spouses have a cause of action against First Insurance. It is settled that where the insurance contract provides for indemnity against liability to a third party, such third party can directly sue the insurer. The liability of the insurer to such third person is based on contract while the liability of the insured to the third party is based on tort. The purpose of statutes enabling an injured person to proceed directly against the insurer is to protect injured persons against the insolvency of the insured who causes such injury, and to give such injured person a certain beneficial interest in the proceeds of the policy.

  2. The trial court did not err in abbreviating the proceedings and rendering judgment based on documentary evidence presented during the pre-trial conference. This is allowed under the Rules of Court provisions aimed at avoiding multiplicity of suits.

  3. First Insurance is not liable in excess of the limits of liability as provided for in the policy contract. The limits of liability in the policy contract determine the maximum amount that the insurer is obligated to pay.

  4. The denial of the petition for relief from judgment by the respondent judge was proper. The petitioner failed to file the petition within the prescribed period of sixty (60) days after learning of the judgment. Thus, the petitioner's filing of the petition for relief from judgment was considered as out of time.

  5. The claim of the petitioner that its liability to third parties under the insurance policy is limited to P20,000.00 only cannot be given consideration at this stage. The decision of the trial court awarding damages has already become final and executory, and can no longer be corrected or amended.

PRINCIPLES:

  • Where the insurance contract provides for indemnity against liability to a third party, such third party can directly sue the insurer.

  • The liability of the insurer to the third party is based on contract, while the liability of the insured to the third party is based on tort.

  • Statutes enabling an injured person to proceed directly against the insurer are intended to protect injured persons against the insolvency of the insured and to give them a beneficial interest in the proceeds of the policy.

  • Procedural rules aimed at avoiding multiplicity of suits prevail over contractual provisions requiring a final judgment against the insured before the person insured can recover on the policy.

  • The insurer's liability under third party liability insurance accrues immediately upon the occurrence of the injury or event upon which the liability depends, and does not depend on the recovery of judgment by the injured party against the insured.

  • Once a decision becomes final and executory, it can no longer be attacked or corrected.

  • Petitions for relief from judgment must be filed within sixty (60) days after the petitioner learns of the judgment and not more than six (6) months after such judgment was entered.

  • The period fixed by the Rules of Court for filing a petition for relief from judgment is non-extendible and never interrupted.