Coscolluela v Rico General Insurance (Civil Procedure)

Elements of Cause of Action

Heirs of Coscolluela, Sr., Inc. v. Rico General Insurance

Facts:

·       Petitioner is a domestic corporation and owner of an Isuzu KBD Pick-up truck;

·       The said truck was insured with respondent;

·       The said vehicle was subsequently severely damaged and rendered unserviceable when fired upon by a group of unidentified armed persons at Hacienda Puyas, Negros Occidental;

·       Petitioner filed a claim of P80,000.00 for the repair of the vehicle but respondent refused to grant it;

·       As a consequence, petitioner  filed a complaint with the RTC of Bacolod City to recover the claim of P80,000.00;

·       Respondent filed a motion to dismiss alleging that the complaint lacks cause of action because firing by armed men is a risk excepted under the provisions in the insurance policy;

·       Respondent alleged that the firing was “an indirect consequence of rebellion, insurrection or civil commotion” which falls within the exception of their insurance policy, viz:

“The Company shall not be liable under any section of the Policy in respect of:

xxx

3.) …any accident, loss, or damage or liability directly, or indirectly, proximately or occasioned by, or traceable to, or arising out of, or in connection with...civil commotion, mutiny, rebellion, insurrection, military or usurped power, or by any direct or indirect consequence thereof…”

·       Petitioner opposed saying it does not apply in the absence of any government proclamation;

Lower court rulings:

RTC: ordered the dismissal of the complaint for lack of cause of action stating that the damage arose from a civil commotion or was a direct result thereof

CA (on certiorari): affirmed the RTC’s dismissal order

Issue: WON the claim by petitioner lacks cause of action

Ruling: No, the allegations set forth in the complaint sufficiently established a cause of action.

The following are the requisites of a cause of action:

(a)   A right in favor of the plaintiff by whatever means and under whatever law is arises or  is  created;

(b)   An obligation on the part of the named defendant to respect, or not to violate such right; and

(c)   An act or omission on the part of the said defendant constituting a violation of the plaintiff’s right or a breach of the obligation of the defendant to the plaintiff;

The facts as alleged clearly define the existence of a right of the petitioner to a just claim against the insurer for the payment of the indemnity for a loss due to an event against which the petitioner’s vehicle was insured.

The insurance contract mentioned therein manifests a right to pursue a claim and a duty on the part of the insurer or private respondent to compensate the insured in case of a risk insured against.

The refusal of the insurer to satisfy the claim and the consequent loss to the petitioner in incurring the cost of acquiring legal assistance on the matter constitutes a violation or an injury brought to the petitioner.

There is, therefore, a sufficient cause of action which the trial court can render a valid judgment.

The facts alleged in the complaint do not give a complete scenario of the real nature of the firing incident. Hence, it was incumbent upon the trial judge to have made a deeper scrutiny into the circumstances of the case by receiving evidence instead of summarily disposing of the case.

The question on the nature of the firing incident for the purpose of determining whether or not the insurer is liable must first be threshed out and resolved in a full-blown trial.