FIRST DIVISION
[G.R. No. 247940. September 29, 2021.]
EMILITA RAMAS WINTHER, BY HERSELF AND AS ATTORNEY-IN-FACT OF ERNEST WINTHER, DOING BUSINESS UNDER THE NAME AND STYLE OF KUZINA ILIGANON RESTAURANT, complainant,vs. UCPB GENERAL INSURANCE CO., INC., respondent.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, First Division, issued a Resolution dated September 29, 2021which reads as follows:
"G.R. No. 247940 (Emilita Ramas Winther, by herself and as Attorney-in-fact of Ernest Winther, doing business under the name and style of Kuzina Iliganon Restaurant v. UCPB General Insurance Co., Inc.). — Emilita Ramas Winther (Emilita), sole proprietor of Kuzina Iliganon Restaurant, secured a one-year business insurance policy package covering fidelity guarantee, money insurance, robbery/burglary, fire and lightning, and compulsory public liability from UCPB General Insurance Company (UCPB) effective 12:00 p.m. of March 11, 2011 to 12:00 p.m. of March 11, 2012. The property insured was a building occupied as a restaurant, located inside a compound along the National Highway, Brgy. Tibanga, Iligan City. The policy's particulars state:
Property insured:
|
On the building excluding its foundation |
P400,000.00 |
|
On the contents, stocks, equipment, FFF |
P600,000.00 |
|
Total |
P1,000,000.00 |
|
Construction: |
On the said building of one-story in height constructed of concrete and timber under G.I. roof |
|
Occupancy: |
Restaurant |
|
Boundary: |
Front: |
By a Barangay Tibanga Road; |
|
|
Right: |
By an open space; |
|
|
Left: |
By four (4) meter distance thence one-story class "A" retail store; |
|
|
Rear: |
By open space. 1 |
In the afternoon of January 1, 2012, a fire gutted Emilita's living quarters and burned the roof of the adjoining quarters occupied by staff April Lou Ramas and Flora Mae Ramas. 2 The total amount of damage sustained was estimated at P1,172,309.00. Emilita filed a claim against the policy. UCPB assigned an independent adjuster, Tan-Gatue Adjustment Company, Inc. (Tan-Gatue), to evaluate Emilita's claim. Tan-Gatue proceeded to the site for inspection and prepared a report. Tan-Gatue found that the policy described the occupancy of the building insured as a restaurant, while the structure that burned down was occupied as Emilita's living quarters. Yet, the living quarters were not specifically described in the policy. Moreover, the rear of the property insured was supposed to be an open space. However, there was a one-story building used as storage area and another one-story building adjoining the rear right portion of the restaurant constructed of light materials and occupied as a storage area, laundry area, living quarters of the restaurant staff, and living quarters of Emilita that was razed by the fire. 3 Accordingly, UCPB denied Emilita's claim. 4
Aggrieved, Emilita filed a Complaint 5 for sum of money and damages against UCPB before the Regional Trial Court (RTC), Iligan City, docketed as Civil Case No. 7627. Emilita averred that the structure which burned down was part of the restaurant and was used as administration office, storage room, and living quarters. 6 On April 21, 2016, the RTC ruled in favor of Emilita and explained that while the policy did not include the structure that burned in the coverage, it also did not exclude it. Moreover, the building was used as Emilita's living quarters, administration office, and storage area which are necessary for the continued and efficient operation of the restaurant. Given two possible interpretations between inclusion and exclusion from coverage, the ambiguity should be resolved in favor of the claimant and against UCPB which solely prepared the contract, 7 thus:
WHEREFORE, based on the foregoing, the Defendant is hereby directed to pay the Plaintiff the sum of One [M]illion [O]ne [H]undred [S]eventy-[T]wo [T]housand [T]hree [H]undred [N]ine (P1,172,309.00) pesos, with one percent (1%) interest per month computed from February 17, 2012 until the same shall be fully paid. The Defendant is also directed to pay the cost of suit.
SO ORDERED. 8
Dissatisfied, UCPB elevated the case to the Court of Appeals (CA) docketed as CA-G.R. CV No. 04390-MIN. 9 On July 24, 2018, the CA reversed the RTC's findings and held that Emilita's living quarters were not physically attached to the main building of the restaurant. In addition, the Insurance Code merely requires that the insurance policy specify the property insured and does not oblige the insurer to state the exclusions such as the surrounding buildings. Lastly, the RTC's ruling that the living quarters are necessary for the continued existence of the restaurant is a stretch of the imagination, 10 to wit:
To declare that the living quarters and the storage room are necessary for the continued existence of the business and that they are part of the restaurant because they are not particularly excluded in the insurance policy is a conclusion that is a stretch beyond imagination. This has no basis in law and jurisprudence. Section 51 of the Insurance Code merely requires that "the policy of insurance must specify the property insured." It does not require the insurer to specify the exclusions, such as the surrounding buildings of the property insured.
This court rules that UCPB has correctly detailed all the necessary elements in the policy without room for ambiguity. A "restaurant" is defined as a place where people pay to sit and eat meals that are cooked and served on the premises. It does not possibly cover, nor does it remotely include, the owner's living quarters, especially if that [sic] living quarters is located three doors away from the restaurant.
There being no ambiguity in the insurance policy, there is therefore no room for interpretation. Where the coverage of the policy is not ambiguous, Winther cannot rely on the general rule that insurance contracts are contracts of adhesion which [sic] should be liberally construed in favor of the insured and strictly against the insurer company which usually prepares it.
FOR THESE REASONS, the appeal is GRANTED. The assailed Decision of the Regional Trial Court dated April 21, 2016 is REVERSED. Civil Case No. 7627 is DISMISSED for utter lack of merit.
SO ORDERED. 11
Emilita sought reconsideration but was denied. 12 Hence, this recourse. Emilita insists that any ambiguity in the insurance policy should be construed against UCPB. Further, the occupancy stated in the policy is merely descriptive and does not limit the coverage of the insurance to specific portions or areas of the building. Finally, the CA erred in admitting UCPB's appeal brief which was filed beyond the reglementary period. On the other hand, UCPB maintains that there is no ambiguity as to the coverage of the insurance policy which excluded the living quarters.
The petition is unmeritorious.
In several instances, the Court relaxed the observance of procedural rules to advance substantial justice. The parties must be given the fullest opportunity to establish the merits of their action or defense rather than for them to lose life, honor, or property on mere technicalities. 13 Here, persuasive reasons exist to admit UCPB's appeal brief. The records show that UCPB, through its new counsel, explained in the "Entry of Appearance with Motion to Admit Appellant's Brief'' that it received on September 12, 2016, the directive to file a brief within 45 days from notice. On September 29, 2016, however, UCPB's former counsel withdrew his appearance without filing the required brief. UCPB, which is based in Manila, was unable to immediately secure the services of representation located in Mindanao. UCPB eventually engaged the services of its new counsel who studied the case, prepared and filed the brief albeit beyond the reglementary period, and moved for its admission in the interest of justice. 14 On this point, we reiterate that technicalities may be excused when strict adherence will impede the achievement of justice it seeks to serve. As such, the CA properly admitted the appellant's brief because UCPB sufficiently explained the reason for the delay. At any rate, UCPB presented a meritorious case.
It is a cardinal rule in the interpretation of contracts that "if the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations shall control."15 The process of interpreting a contract requires the Court to make a preliminary inquiry as to whether the contract before it is ambiguous. A contract provision is ambiguous if it is susceptible to two reasonable alternative interpretations. Where the written terms of the contract are not ambiguous and can only be read one way, the Court will interpret the agreement as a matter of law. 16 As Bautista v. Court of Appeals17 aptly discussed:
The rule is that where the language of a contract is plain and unambiguous, its meaning should be determined without reference to extrinsic facts or aids. The intention of the parties must be gathered from that language, and from that language alone. Stated differently, where the language of a written contract is clear and unambiguous, the contract must be taken to mean that which, on its face, it purports to mean, unless some good reason can be assigned to show that the words used should be understood in a different sense. Courts cannot make for the parties better or more equitable agreements than they themselves [sic] have been satisfied to make, or rewrite contracts because they operate harshly or inequitably as to one of the parties, or alter them for the benefit of one party and to the detriment of the other, or by construction, relieve one of the parties from terms which he voluntarily consented to, or impose on him those which he did not.
Here, there is no ambiguity in the contract between the parties. Section 51 of the Insurance Code enumerates the mandatory contents of an insurance policy. The law provides that the policy must specify the property insured, among others, but does not require that exclusions from the coverage be explicitly stated, to wit:
SECTION 51. A policy of insurance must specify:
(a) The parties between whom the contract is made;
(b) The amount to be insured except in the cases of open or running policies;
(c) The premium, or if the insurance is of a character where the exact premium is only determinable upon the termination of the contract, a statement of the basis and rates upon which the final premium is to be determined;
(d) The property or life insured;
(e) The interest of the insured in property insured, if he is not the absolute owner thereof;
(f) The risks insured against; and
(g) The period during which the insurance is to continue. 18
In this case, the policy explicitly provided that the insured property is a "building of one-story in height constructed of concrete and timber under G.I. roof'' and occupied as a "restaurant." Contrary to the RTC's findings, there is no ambiguity in the language of the insurance policy. 19 As such, the contract of insurance, like other contracts, is to be construed according to the sense and meaning of the terms which the parties themselves have used. If such terms are clear and unambiguous, they must be taken and understood in their plain, ordinary and popular sense. 20 To be sure, Emilita herself alleged in the petition that she "secured a property insurance of the one-story building constructed of concrete and lumber with G.I. roof utilized solely for a restaurant business with its accessories and appurtenances" from UCPB. 21 Even the RTC recognized that "[t]he damaged building was not physically attached to the main building constituting the restaurant." Clearly, the property insured was the building used as a restaurant alone. The living quarters of Emilita and the restaurant staff, obviously not being used as a restaurant, were excluded from the coverage of the policy. As the CA aptly observed, "[i]t appears that the properties damaged by fire, assured's living quarters and the storage area, are not a part of the one-story building whose occupancy is described as a 'restaurant' in the insurance policy." Lastly, these findings are bolstered by the fact that Emilita obtained a business insurance package covering fraudulent or dishonest acts committed by employees, money insurance, robbery/burglary, fire and lightning, and compulsory public liability including food poisoning from UCPB. Emilita was assessed and paid premiums solely for the restaurant and not the adjoining structures.
The Court reiterates that the terms and conditions of the contract sought to be enforced must be adhered to, and the Court is not empowered to alter them or to prescribe any other condition not previously agreed to by the parties. It is not the province of the Court to alter a contract by construction or to make a new contract for the parties. Its duty is confined to the interpretation of the one which they have made for themselves, without regard to its wisdom or folly, as the Court cannot supply material stipulations or read into the contract words which it does not contain. 22
FOR THESE REASONS, the petition is DISMISSED. The Court of Appeals Decision dated July 24, 2018 in CA-G.R. CV No. 04390-MIN is AFFIRMED.
SO ORDERED."
By authority of the Court:
(SGD.) LIBRADA C. BUENADivision Clerk of Court
by:
MARIA TERESA B. SIBULODeputy Division Clerk of Court
Footnotes
1.Rollo, p. 183.
2.Id. at 66; Id. at 69; Id. at 209.
3.Id. at 208-211.
4.Id. at 212.
5.Id. at 38.
6.Id. at 37-41.
7.Id. at 112-113.
8.Id. at 113-114.
9.Id. at 115-122.
10.Id. at 30-36. Penned by Associate Justice Edgardo A. Camello, with the concurrence of Associate Justices Perpetua T. Atal-Paño and Walter S. Ong.
11.Id. at 35.
12.Id. at 150-151.
13.Commissioner of Customs v. PTT Philippines Trading Corp., G.R. Nos. 203138-40, February 15, 2021.
14.Rollo, pp. 124-125.
15. New Civil Code, Article 1370, first paragraph.
16.Abad v. Goldloop Properties, Inc., 549 Phil. 641, 654 (2007).
17. 379 Phil. 386, 399 (2000).
18. Amendments to P.D. No. 612, as Amended (The Insurance Code), Republic Act No. 10607, August 15, 2013.
19.Loyola Life Plans, Inc. v. ATR Professional Life Assurance Corp., G.R. Nos. 228402 & 222912, August 26, 2020.
20.Alpha Insurance and Surety Co. v. Castor, 717 Phil. 131, 137-138 (2013).
21.Rollo, p. 17.
22.Bank of Commerce v. Manalo, 517 Phil. 328, 353 (2006); LL & Company Development & Agro-Industrial Corp. v. Huang Chao Chun, 428 Phil. 665, 675-676 (2002); and Bacolod-Murcia Milling Co., Inc. v. Banco Nacional Filipino, 74 Phil. 675, 680 (1944).