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DBP POOL OF ACCREDITED INSURANCE COMPANIES v. RADIO MINDANAO NETWORK

FACTS:

This case involves a dispute between Radio Mindanao Network, Inc. (respondent) and DBP Pool of Accredited Insurance Companies (petitioner) and Provident Insurance Corporation (Provident). Respondent owns broadcasting stations and had insurance coverage for its transmitter equipment and generating set under a policy with Provident and for its other transmitter facilities under a policy with petitioner. A fire broke out in respondent's radio station in Bacolod City, causing significant damage. Respondent filed a claim with the insurance companies, but the claims were denied on the basis that the cause of loss was an excepted risk under the policies.

Subsequently, respondent filed a civil case against petitioner and Provident seeking recovery of insurance benefits. After trial, the Regional Trial Court ruled in favor of respondent and awarded damages. The Court of Appeals affirmed the decision but modified the interest rate. Dissatisfied with the decision, petitioner filed a petition for certiorari before the court. Petitioner challenged the factual finding that the loss was caused by members of the Communist Party of the Philippines/New People's Army (CPP/NPA) and disputed the award of damages.

ISSUES:

  1. Whether the admission of certain evidence is inadmissible under Section 22, Rule 130 of the Rules of Court.

  2. Whether the burden of proof rests on the insured or the insurer in proving that the loss is covered by the insurance policy.

  3. Whether the reports of witnesses claiming the identity of the perpetrators as an exception to the hearsay rule should be admitted as part of res gestae.

RULING:

  1. The admission of evidence is inadmissible under Section 22, Rule 130 of the Rules of Court. An admission is only competent when the declarant or someone identified in legal interest with him is a party to the action.

  2. The burden of proof rests on the insured to prove that the damage or loss was caused by an excepted risk in order to escape any liability under the insurance contract.

  3. The reports of witnesses claiming the identity of the perpetrators are not admissible as an exception to the hearsay rule. Hearsay evidence is not given under oath or solemn affirmation and has not been subjected to cross-examination to test its reliability.

PRINCIPLES:

  • Findings of fact of the trial court as affirmed by the Court of Appeals are conclusive and binding on the parties, and will not be reviewed by the Supreme Court unless there are exceptional circumstances.

  • An insurance contract, being a contract of adhesion, should be interpreted in a way that carries out the purpose for which the parties entered into the contract, which is to insure against risks of loss or damage to the insured goods.

  • The burden of proof in insurance cases lies with the insurer to prove that the loss comes within the purview of an exception or limitation in the policy.

  • Once the insured makes out a prima facie case, the burden of evidence shifts to the insurer to prove why an excepted risk does not release the insured from any liability.

  • Res gestae is an exception to the hearsay rule and refers to exclamations and statements made by participants, victims, or spectators to a crime immediately before, during, or after its commission. The statements must be a spontaneous reaction or utterance inspired by the excitement of the occasion and without the opportunity for the declarant to fabricate a false statement.

  • Admissibility of evidence depends on its relevance and competence, while the weight of evidence pertains to its ability to convince and persuade. Admissible evidence may not be sufficient proof and should be considered in relation to other evidence on record.

  • The burden of proof rests on the party asserting a fact, and suspicion alone is not sufficient to prove a claim. The preponderance of evidence is the quantum of proof required.