Lopez v. Filipinas Compañia de Seguros
REITERATIONFacts
The Antecedents: Plaintiff-appellant Alfonso G. Lopez applied for property insurance with defendant-appellee Filipinas Compañia de Seguros for a truck tractor and trailer. In response to a question about whether any company had declined, cancelled, or refused to renew his insurance, Lopez answered "none," despite the fact that American International Underwriters of the Philippines (AIU) had previously declined a similar application for the same vehicles. On April 22, 1959, the defendant issued two Commercial Vehicle Comprehensive Policies. On August 30, 1959, the vehicles were involved in an accident, resulting in total loss of the tractor and partial damage to the trailer. Lopez filed a claim for P27,962.00. Procedural History: On April 28, 1960, the defendant rejected the claim, citing concealment of a material fact. On May 27, 1960, Lopez filed a complaint with the Office of the Insurance Commissioner. The Assistant Insurance Commissioner suggested arbitration, but the defendant refused, stating that arbitration was only for disputes regarding the amount of liability, not for cases where liability was denied. Lopez then filed a complaint with the Court of First Instance of Manila on September 19, 1961. The defendant moved to dismiss on the ground of prescription, arguing that the action was not commenced within twelve months of the claim's rejection, as stipulated in the policy. The Court of First Instance granted the motion and dismissed the complaint. The Petition: Plaintiff-appellant appealed the dismissal, arguing that his complaint filed with the Office of the Insurance Commissioner constituted the commencement of an "action or suit" within the meaning of the policy's prescriptive clause.
Issue(s)
Whether the complaint filed by the plaintiff-appellant with the Office of the Insurance Commissioner on May 27, 1960, constitutes the commencement of an 'action or suit' within the meaning of the insurance policy's prescriptive clause.
Ruling
The Supreme Court affirmed the order of the Court of First Instance, dismissing the plaintiff-appellant's complaint. The Court ruled that the claim had prescribed.
Ratio Decidendi
On Issue 1: The Court ruled that the terms 'action' and 'suit' are settled in jurisprudence as synonymous, referring specifically to proceedings initiated in a court of justice. Citing Rule 2, Section 1 of the Rules of Court, the Court defined an action as an ordinary suit in a court of justice by which one party prosecutes another for the enforcement of a right or the redress of a wrong. The filing of a claim or complaint with an administrative body or any office that is not a court of justice does not satisfy this legal definition. Furthermore, the Court noted that there is no provision in the Insurance Law (Act No. 2427) or allied legislations that empowers the Insurance Commissioner to adjudicate disputes regarding an insurer's liability. The determination of a claim's validity, its amount, and the interpretation of policy terms are issues that only a regular court of justice may resolve. Because the Office of the Insurance Commissioner lacks the power to grant the relief sought (enforcement of the policy), the filing of a complaint therein cannot be considered an 'action or suit.' Consequently, the twelve-month prescriptive period stipulated in the policy continued to run despite the administrative complaint, and the judicial filing seventeen months after rejection was late.
Main Doctrine
Filing a complaint with the Office of the Insurance Commissioner does not constitute an "action or suit" within the meaning of the prescriptive period clause in an insurance policy, as such terms refer to proceedings filed before a court of justice.