Summit Guaranty & Insurance Company, Inc. v. Arnaldo
REITERATIONFacts
The Antecedents: A vehicular accident occurred on November 26, 1976, involving a Ford Pick-up owned by Marcos Olaso and a cargo truck owned by Alberto Floralde. FGU Insurance Corporation (FGU), as insurer of Olaso's vehicle, paid Olaso P2,817.50 for repair costs due to motor vehicle insurance policy coverage. FGU, subrogated to Olaso's rights, demanded payment from Floralde, who failed to reveal his insurance carrier. FGU later identified Summit Guaranty and Insurance Company, Inc. (Summit) as Floralde's insurer. FGU made demands on Summit, which were unheeded, leading FGU to file a complaint (IC Case No. 825) with the Insurance Commissioner's Office on May 22, 1978. Procedural History: Summit filed a motion to dismiss on May 30, 1978, alleging prescription under Section 384 of PD 612. The Insurance Commissioner deferred resolution of the motion until after a hearing on the merits, which was upheld upon Summit's motion for reconsideration. Summit then filed a petition for certiorari and prohibition with the Supreme Court, arguing that the Commissioner acted with grave abuse of discretion in denying the motion to dismiss, as the action had already prescribed. The Petition: Summit sought an order to restrain the Insurance Commissioner from further proceeding with the case, contending that the action was filed beyond the one-year prescriptive period provided by Section 384 of PD 612.
Issue(s)
Whether the respondent Commissioner acted without or in excess of jurisdiction or with grave abuse of discretion in denying Summit's motion to dismiss. Whether FGU's claim against Summit had prescribed under Section 384 of PD 612.
Ruling
The petition is dismissed for lack of merit. The respondent Commissioner is directed to terminate the proceedings in IC No. 825 with deliberate dispatch. No motion for extension of time to file a motion for reconsideration shall be entertained.
Ratio Decidendi
On the issue of the respondent Commissioner's denial of the motion to dismiss: The Supreme Court found no merit in Summit's petition. The Court reiterated that the deferment of a motion to dismiss until after a hearing on the merits is proper under Section 3, Rule 16 of the Rules of Court if the ground alleged is not indubitable. This avoids multiplicity of appeals and allows for a thorough determination of the case. The remedy against the denial of a motion to dismiss is generally an appeal after the case is decided on the merits, unless the trial court clearly acted outside its jurisdiction or with grave abuse of discretion. In this case, the Commissioner's doubt regarding the prescription claim warranted deferment, not outright dismissal. The Court noted that Summit's petition for certiorari and prohibition was an extraordinary remedy not warranted by the circumstances. On the issue of whether FGU's claim against Summit had prescribed under Section 384 of PD 612: Regarding the prescription issue, the Court examined Section 384 of PD 612, which provides a one-year period for bringing an action or suit from the date of the accident, unless the claim is filed within six months from the accident. The Court found persuasive the arguments that the prescriptive period began from the date of payment to Olaso, not the accident, and that the extrajudicial demand made by FGU interrupted the prescriptive period, particularly in light of previous rulings concerning Summit's dilatory tactics. The Court referenced its prior decisions in similar cases involving Summit Guaranty & Insurance Co., Inc., which interpreted Section 384 of the Insurance Code, holding that the phrase "in proper cases" indicated that the one-year period was not absolute and did not always commence from the date of the accident. The Court found that Summit had engaged in deliberate efforts to stall settlement proceedings, making private respondents believe their claims would be settled, thereby preventing them from filing suit within the one-year period. Consequently, the Court ruled that the one-year period should be counted from the date of rejection by the insurer, as this is when the cause of action accrues. Since no rejection had occurred and the complaint was filed before denial, prescription had not yet set in. The Court also noted that Section 384 was amended by Batas Pambansa to explicitly state that the one-year period runs from the denial of the claim.
Main Doctrine
The one-year prescriptive period under Section 384 of PD 612 (Insurance Code) for bringing an action or suit for recovery of damages does not necessarily commence from the date of the accident, but may commence from the date of denial of the claim or when the cause of action accrues, especially when the insurer employs dilatory tactics to avoid payment.