Calanoc v. Court of Appeals

Melencio Basilio, a watchman of the Manila Auto Supply, held a P2,000 life policy from Philippine American Life Insurance Co. with a supplementary contract covering death by accident. On the night of January 25, 1951, Atty. Ojeda, suspecting intruders in his house a block away, asked Basilio for help; Basilio declined because he was not a policeman and pointed him to a traffic policeman. When the policeman and Ojeda passed by, they invited Basilio along. As the three stood at Ojeda's gate, a shot fired from inside the yard hit Basilio in the abdomen and killed him; the house had been ransacked, and four persons were later prosecuted for robbery in band with murder. The insurer paid the widow, Virginia Calanoc, the P2,000 face value but refused the P2,000 accident benefit, invoking the policy's exclusions for death while making an arrest as an officer of the law and death from assault or murder. The municipal court and the court of first instance ruled for her; the Court of Appeals reversed, holding the death intentional and not accidental.

1. 1Whether Basilio's death was accidental and covered by the supplementary accident policy.
2. 2Whether his death fell within the policy's exclusions for making an arrest as an officer of the law or for assault or murder.

The death was covered. The Court disagreed with the Court of Appeals. Basilio's going along was not a capricious exposure of his life to danger: the place he guarded was only a block away, the risk was inherent in his position, and he acted in what he believed was his duty as a watchman and a citizen. He was not making an arrest as an officer of the law, since he neither went for that purpose nor was asked to by the policeman. Nor was it shown that he died in the course of an assault or murder: the record did not show how the shot was fired, the shooter might have fired only to scare people away, and "the happening was a pure accident on the part of the victim." Although parties may limit a policy's coverage and except certain risks, exception clauses should be clearly worded; doubtful or obscure terms must be resolved against the party who caused the obscurity under Article 1377 of the Civil Code, and ambiguous policy terms are construed strictly against the insurer and liberally in favor of the insured, who has no voice in choosing the words. "An insurer should not be allowed, by the use of obscure phrases and exceptions, to defeat the very purpose for which the policy was procured." The death was therefore not within the exception clause. The Court reversed the Court of Appeals and ordered the insurer to pay P2,000 with legal interest from January 26, 1951 until fully paid, with costs.