G.R. No. L-51221, 31 July 1991, 199 SCRA 796

FACTS:

Silverio Blanco was the owner of a passenger jeepney which he insured against liabilities for death and injuries to third persons with First Integrated Bonding and Insurance Company, Inc. for P30,000. The said jeepney driven by Blanco himself bumped a five-year old child, Deogracias Advincula, causing the latter’s death.
A complaint damages was brought by the child’s parents, the Advincula spouses, against Silverio Blanco. First Insurance was also impleaded in the complaint as the insurer. Summons were served on Silverio Blanco and First Insurance. However, only Blanco filed an answer. Upon motion of the Advincula spouses, First Insurance was declared in default. On the basis of the evidence presented by the Advincula spouses, judgment was rendered by the trial court on March 1, 1978. First Insurance received a copy of the decision on March 14, 1978. Upon motion of the Advincula spouses, the decision was amended on March 27, 1978 (p. 17,Rollo), which, in addition to the damages granted in the original decision, awarded damages in the amount of P6,336.50 to Silverio Blanco
First Insurance then filed a petition for certiorari contending that the victim’s parents have no cause of action against it because they are not parties to the insurance contract and that they may only proceed against the driver based on the provisions of the New Civil Code.

ISSUE:

Whether or not an injured party for whom the contract of insurance is intended can sue directly the insurer

HELD:

YES. It is settled where the insurance contract provides for indemnity against liability to a third party, such third party can directly sue the insurer. The liability of the insurer to such third person is based on contract while the liability of the insured to the third party is based on tort. It cannot evade its liability as insurer by hiding under the cloak of the insured. Its liability is primary and not dependent on the recovery of judgment from the insured.

Compulsory Motor Vehicle Liability Insurance (third party liability, or TPL) is primarily intended to provide compensation for the death or bodily injuries suffered by innocent third parties or passengers as a result of a negligent operation and use of motor vehicles. The victims and/or their dependents are assured of immediate financial assistance, regardless of the financial capacity of the motor vehicle owners.
. . . the insurer’s liability accrues immediately upon the occurrence of the injury or event upon which the liability depends, and does not depend on the recovery of judgment by the injured party against the insured

*Case digest by Russel Vincent T. Saracho, LLB-IV, Andres Bonifacio College Law School, SY 2018-2019