DIGEST - Malayan Insurance Co., Inc. vs. Lin

G.R. No.
207277, January 16, 2017

MALAYAN INSURANCE CO., INC., YVONNE S. YUCHENGCO, ATTY. EMMANUEL G.
VILLANUEVA, SONNY RUBIN,1 ENGR. FRANCISCO MONDELO, and MICHAEL
REQUIJO, vs. EMMA CONCEPCION L. LIN,
FACTS:
Lin filed an action for collection of sum of money whereby she alleged that she
obtained various loans from RCBC secured by six clustered warehouses located at
Plaridel, Bulacan; that the five warehouses were insured with Malayan against fire
for ₱56 million while the remaining warehouse was insured for ₱2 million; that on
February 24, 2008, the five warehouses were gutted by fire; that on April 8, 2008
the Bureau of Fire Protection (BFP) issued a Fire Clearance Certification to her after
having determined that the cause of fire was accidental; that despite the foregoing,
her demand for payment of her insurance claim was denied since the forensic
investigators hired by Malayan claimed that the cause of the fire was arson and not
accidental; that she sought assistance from the Insurance Commission (IC) which,
after a meeting among the parties and a conduct of reinvestigation into the cause/s
of the fire, recommended that Malayan pay Lin's insurance claim and/or accord
great weight to the BFP's findings; that in defiance thereof, Malayan still denied or
refused to pay her insurance claim; and that for these reasons, Malayan's corporate
officers should also be held liable for acquiescing to Malayan's unjustified refusal to
pay her insurance claim.
As against RCBC, Lin averred that notwithstanding the loss of the mortgaged
properties, the bank refused to go after Malayan and instead insisted that she
herself must pay the loans to RCBC, otherwise, foreclosure proceedings would
ensue; and that to add insult to injury, RCBC has been compounding the interest on
her loans, despite RCBC's failure or refusal to go after Malayan.
Some five months later, or on June 17, 2010, Lin filed before the IC an
administrative case against Malayan, represented this time by Yvonne. This was
docketed as Administrative Case No. 431.
In this administrative case, Lin claimed that since it had been conclusively found
that the cause of the fire was "accidental," the only issue left to be resolved is
whether Malayan should be held liable for unfair claim settlement practice under
Section 241 in relation to Section 247 of the Insurance Code due to its unjustified
refusal to settle her claim; and that in consequence of the foregoing failings,
Malayan's license to operate as a non-life insurance company should be revoked or
suspended, until such time that it fully complies with the IC Resolution ordering it
to accord more weight to the BFP's findings.
On August 17, 2010, Malayan filed a motion to dismiss Civil Case No. 10-122738
based on forum shopping. It argued that the administrative case was instituted to
prompt or incite IC into ordering Malayan to pay her insurance claim; that the
elements of forum shopping are present in these two cases because there exists
identity of parties since Malayan's individual officers who were impleaded in the
civil case are also involved in the administrative case; that the same interests are
shared and represented in both the civil and administrative cases; that there is
identity of causes of action and reliefs sought in the two cases since the
administrative case is merely disguised as an unfair claim settlement charge,
although its real purpose is to allow Lin to recover her insurance claim from
Malayan; that Lin sought to obtain the same reliefs in the administrative case as in
the civil case; that Lin did not comply with her sworn undertaking in the
Certification on Non-Forum Shopping which she attached to the civil case, because
she deliberately failed to notify the RTC about the pending administrative case
within five days from the filing thereof.
The RTC denied the motion, it held that in the administrative case, Lin was seeking
a relief clearly distinct from that sought in the civil case which was affirmed by the
Court of Appeals. Hence, this petition.
ISSUE:
Whether or not the petitioner committed forum shopping that warrants the
dismissal of this case.
RULING:
We deny this Petition.
"The settled rule is that criminal and civil cases are altogether different from
administrative matters, such that the disposition in the first two will not
inevitably govern the third and vice versa.” In the context of the case at bar,
matters handled by the IC are delineated as either regulatory or adjudicatory,
both of which have distinct characteristics, as postulated in Almendras Mining
Corporation v. Office of the Insurance Commission:
The provisions of the Insurance Code (Presidential Decree [P.D.]

No. 1460), as amended, clearly indicate that the Office of the [IC]
is an administrative agency vested with regulatory power as
well as with adjudicatory authority. Among the several
regulatory or non-quasi-judicial duties of the Insurance
Commissioner under the Insurance Code is the authority to
issue, or refuse issuance of, a Certificate of Authority to a person
or entity desirous of engaging in insurance business in the
Philippines, and to revoke or suspend such Certificate of
Authority upon a finding of the existence of statutory grounds
for such revocation or suspension. The grounds for revocation
or suspension of an insurer's Certificate of Authority are set out
in Section 241 and in Section 247 of the Insurance Code as
amended. The general regulatory authority of the Insurance
Commissioner is described in Section 414 of the Insurance Code,
as amended, in the following terms:
'Section 414. The Insurance Commissioner shall have the duty to

see that all laws relating to insurance, insurance companies and
other insurance matters, mutual benefit associations, and trusts
for charitable uses are faithfully executed and to perform the
duties imposed upon him by this Code, and shall, notwithstanding
any existing laws to the contrary, have sole and exclusive
authority to regulate the issuance and sale of variable contracts
as defined in section two hundred thirty-two and to provide for
the licensing of persons selling such contracts, and to issue such
reasonable rules and regulations governing the same.
The Commissioner may issue such rulings, instructions, circulars,

orders[,] and decisions as he may deem necessary to secure the
enforcement of the provisions of this Code, subject to the approval
of the Secretary of Finance [DOF Secretary]. Except as otherwise
specified, decisions made by the Commissioner shall be appealable
to the [DOF Secretary].' (Italics supplied)
which Section also specifies the authority to which a decision of the Insurance
Commissioner rendered in the exercise of its regulatory function may be
appealed.
Go v. Office of the Ombudsman36reiterated the above-stated distinctions vis-a-

vis the principles enunciating that a civil case before the trial court involving
recovery of payment of the insured's insurance claim plus damages, can proceed
simultaneously with an administrative case before the IC. Expounding on the
foregoing points, this Court said -
**The findings of the trial court will not necessarily foreclose the administrative
case before the [IC], or [vice versa]. True, the parties are the same, and both actions
are predicated on the same set of facts, and will require identical evidence. But the
issues to be resolved, the quantum of evidence, the procedure to be followed[,] and
the reliefs to be adjudged by these two bodies are different.

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G.R. No.

207277, January 16, 2017

The provisions of the Insurance Code (Presidential Decree [P.D.]

'Section 414. The Insurance Commissioner shall have the duty to

The Commissioner may issue such rulings, instructions, circulars,

Go v. Office of the Ombudsman36reiterated the above-stated distinctions vis-a-

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