Case Digest (G.R. No. 160090) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In Chartis Philippines Insurance, Inc. v. Cyber City Teleservices, Ltd., petitioner Chartis (formerly Philam Insurance Co., Inc. and now AIG Philippines Insurance, Inc.), a domestic insurer, issued two one-year policies—professional indemnity (Policy No. 130100285) and fidelity insurance (Policy No. 130100284)—effective January 20, 2005 with aggregate limits of US$2,000,000 each. Through broker Jardine Lloyd Thompson Insurance Brokers (JLT), respondent Cyber City Teleservices, Ltd. (CCTL), a Makati‐based CRM call center, accepted Chartis’s quotations of US$56,325 and US$45,060, respectively, inclusive of taxes, with a 90-day premium payment term. As the 90-day term lapsed unpaid, Chartis granted successive email extensions until June 15, 2005, then canceled both policies, credited short-rate “time-on-risk” premiums, and demanded full settlement including documentary stamp tax (DST). Unpaid, Chartis sued in the Makati RTC for the sums due, damages, attorneys’ fees, and costs. CCT Case Digest (G.R. No. 160090) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Parties and Insurance Products
- Chartis Philippines Insurance, Inc. (formerly Philam Insurance Co., now AIG Philippines Insurance, Inc.) is a domestic insurer offering professional indemnity and fidelity insurance.
- Cyber City Teleservices, Ltd. (CCTL) is a call‐center agency specializing in customer relationship management, represented by Jardine Lloyd Thompson Insurance Brokers (JLT).
- Formation of the Insurance Contracts
- June 21, 2004 – JLT applied to Chartis for quotations on professional indemnity (US$56,325 premium) and fidelity insurance (US$45,060 premium), each with US$2,000,000 aggregate limits, coverage from January 20, 2005 to January 20, 2006, and 90‐day premium payment terms.
- January 20, 2005 – JLT’s “Placing Instructions” confirmed CCTL’s acceptance, effective 12:01 AM Philippine Time, and guaranteed payment of documentary stamp tax (DST). Chartis issued Policy Nos. 130100284 (fidelity) and 130100285 (professional indemnity) and paid the DST.
- Credit Extensions, Cancellation, and Demand for Payment
- As the 90‐day term neared expiration, Chartis granted CCTL credit extensions—first to April 20, then April 30, June 3, and finally June 15, 2005—upon JLT’s email requests.
- June 15, 2005 – With no payment made, Chartis cancelled both policies, credited “time‐on‐risk” premiums of US$24,036 and US$30,045, and demanded full payment via letters dated August 8, September 14, and November 8, 2005.
- Litigation History
- Chartis filed suit for sum of money with damages; CCTL answered, denied agency, invoked Section 77 of the Insurance Code (no binding policy absent paid premium), and counterclaimed for damages and costs.
- The Makati RTC (Branch 139) granted Chartis summary judgment (September 30, 2011), ordering CCTL to pay earned premiums (US$47,304) plus taxes, 12% interest, P100,000 attorney’s fees, and P60,713.32 costs. CCTL’s counterclaim was dismissed.
- The CA reversed (February 20, 2017), dismissed Chartis’s complaint for lack of a binding policy, and denied CCTL’s damage claims. The SC granted Chartis’s certiorari petition and resolved on March 3, 2021.
Issues:
- Whether Chartis is entitled to payment of the premiums despite non‐payment at inception.
- Whether the “time‐on‐risk” (pro rata/short‐rate) provisions contravene law, morals, or public policy.
- Whether CCTL must reimburse Chartis for the documentary stamp tax paid.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)