[G.R. No. 154115.

 June 28, 2006]

PHILIP S. YU, petitioner v. HON. COURT OF APPEALS, SECOND DIVISION, AND VIVECA LIM YU,
respondent

Facts:

On 15 March 1994, Viveca Lim Yu (private respondent) brought against her husband, Philip Sy Yu
(petitioner), an action for legal separation and dissolution of conjugal partnership on the grounds of
marital infidelity and physical abuse. The case was filed before the RTC of Pasig. During trial, private
respondent Lim Yu moved for the issuance of a subpoena duces tecum and ad testificandum, to certain
officers of Insular Life Assurance Co. Ltd. to compel production of the insurance policy and application of
a person suspected to be petitioner’s illegitimate child. 

The trial court denied the motion, It ruled that the insurance contract is inadmissible evidence in view of
Circular Letter No. 11-2000, issued by the Insurance Commission which presumably prevents insurance
companies/agents from divulging confidential and privileged information pertaining to insurance
policies.  It added that the production of the application and insurance contract would violate Article
280 of the Civil Code and Section 5 of the Civil Registry Law, both of which prohibit the unauthorized
identification of the parents of an illegitimate child.  Private respondent sought reconsideration of
the Order, but the motion was denied by the trial court.

On appeal to the CA, the court summarized the issues as follows: (i) whether or not an insurance
policy and its corresponding application form can be admitted as evidence to prove a party’s extra-
marital affairs in an action for legal separation; and (ii) whether or not a trial court has the discretion
to deny a party’s motion to attach excluded evidence to the record under Section 40, Rule 132 of the
Rules of Court. Additionally, private respondent was merely seeking the production of the insurance
application and contract, and was not yet offering the same as part of her evidence.  Thus, it declared
that petitioner’s objection to the admission of the documents was premature, and the trial court’s
pronouncement that the documents are inadmissible, precipitate.

Issue:

Whether or not an insurance policy and its corresponding application form can be admitted as evidence
to prove a party’s extra-marital affairs in an action for legal separation?

(Did the CA commit an error of judgment in denying petitioner’s Motion.)

Ruling:
The insurance application and the insurance policy were yet to be presented in court, much less formally
offered before it.  In fact, private respondent was merely asking for the issuance of subpoena duces
tecum and subpoena ad testificandum when the trial court issued the assailed Order.  Even assuming
that the documents would eventually be declared inadmissible, the trial court was not then in a position
to make a declaration to that effect at that point.  Thus, it barred the production of the subject
documents prior to the assessment of its probable worth. As observed by petitioners, the  assailed Order
was not a mere ruling on the admissibility of evidence; it was, more importantly, a ruling affecting the
proper conduct of trial.

Excess of jurisdiction refers to any act which although falling within the general powers of the judge is
not authorized and is consequently void with respect to the particular case because  the conditions
under which  he was only authorized to  exercise his general power in that case did not exist and
therefore, the judicial power was not legally exercised.Thus, in declaring that the documents are
irrelevant and inadmissible even before they were formally offered, much less presented before it, the
trial court  acted in excess of its discretion.

Anent the issue of whether the information contained in the documents is privileged in nature, the same
was clarified and settled by the Insurance Commissioner’s opinion that the circular on which the trial
court based its ruling was not designed to obstruct lawful court orders. Hence, there is no more
impediment to presenting the insurance application and policy.

Sec.40. Tender of excluded evidence.—If documents or things offered in evidence are excluded by the
court, the offeror may have the same attached to or made part of the record.  If the evidence excluded
is oral, the offeror may state for the record the name and other personal circumstances of the witness
and the substance of the proposed testimony.

         It is thus apparent that before tender of excluded evidence is made, the evidence must have been
formally offered before the court.   And before formal offer of evidence  is made, the evidence must
have been identified and  presented before the court. While private respondent made a “Tender of
Excluded Evidence,” such is not the tender contemplated by the above-quoted rule, for obviously, the
insurance policy and application were not formally offered much less presented before the trial court. 
At most, said “Tender of Excluded Evidence” was manifestation of an undisputed fact that the subject
documents were declared inadmissible by the trial court even before these were presented during trial. 
It was not the kind of plain, speedy and adequate remedy which private respondent could have resorted
to instead of the petition for certiorari she filed before the Court of Appeals. It did not in any way render
the said petition moot.       

Fulton Fire Insurance Company issued a policy, in favor of P. & S Department Store (Sally C. Ang) over stocks of
general merchandise, consisting principally of dry goods, contained in a building occupied by the plaintiffs at Laoag,
Ilocos Norte. The insurance was issued for one year, but the same was renewed for another year.
On December 17, 1954, the store containing the goods insured was destroyed by fire. The plaintiffs executed the
first claim form. However Fulton Fire Insurance Company wrote that their claim was denied and was received by
the plaintiffs.

On January 13, 1955, plaintiff Paulo Ang and ten others were charged for arson in Criminal Case. The case was
remanded for trial to the CFI of Ilocos Norte and it acquitted plaintiff of the crime of arson. The present action was
instituted on May 5, 1958 to recover from them the fire insurance policy. The action was originally instituted
against both the Fulton Fire Insurance Company and the Paramount Surety and Insurance Company, Inc., but on
June 16, 1958, upon motion of the Paramount Surety, the latter was dropped from the complaint.

Fulton Fire Insurance contended that since the claim of the plaintiffs was denied and plaintiffs received notice of
denial on April 18, 1956, and they brought the action only on May 5, 1958, all the benefits under the policy
have been forfeited. Plaintiffs filed a reply alleging that on May 11, 1956, plaintiffs had instituted Civil Case No.
2949 in the Court of First Instance of Manila, to assert the claim. The case was dismissed without prejudice on
September 3, 1957 and that deducting the period within which said action was pending, the present action was still
within the 12 month period from April 12, 1956.

The court below held that the bringing of the action in the Court of First Instance of Manila on May 11, 1956,
tolled the running of the 12 month period within which the action must be filed. The Court rendered decision in
favor of the plaintiffs.

ISSUE: Did the bringing of the action in the CFI (Civil Case No. 2949) tolled the running of the 12 month period? –
NO

RULING:

The condition contained in the insurance policy that claims must be presented within one year after rejection is not
merely a procedural requirement. The condition is an important matter, essential to a prompt settlement of
claims against insurance companies, as it demands that insurance suits be brought by the insured while the
evidence as to the origin and cause of destruction have not yet disappeared.

It is in the nature of a condition precedent to the liability of the insurer, or in other terms, a resolutory cause,
the purpose of which is to terminate all liabilities in case the action is not filed by the insured within the period
stipulated.

E. Macias & Co. vs. China Fire Insurance Co provides:

The contractual station in an insurance policy prevails over the statutory limitation, as well as over the
exceptions to the statutory limitations that the contract necessarily supersedes the statute (of limitations) and the
limitation is in all phases governed by the former.

Their contract is the law between the parties, and their agreement that an action on a claim denied by the
insurer must be brought within one year from the denial, governs, not the rules on the prescription of actions.

 Notes: Paragraph 13 of the insurance policy:

o If the claim be in any respect fraudulent, or if any false declaration is made or used in support
thereof, or if any fraudulent means or devices are used by the Insured or any one acting on his
behalf to obtain any benefit under this Policy, or, if the loss or damage be occasioned by the
willful act or with connivance of the Insured, or, if the claim be made and rejected and an
action or suit be not commenced within twelve months after such rejection or (in case of
arbitration place in pursuance of the 18th condition of this Policy) within twelve months
after the arbitrator or arbitrators or umpire shall have made their award, all benefits under
this Policy shall be forfeited.