ALFONSO G. LOPEZ, PLAINTIFF AND APPELLANT, VS. FILIPINAS COMPAÑIA DE SEGUROS, DEFENDANT AND APPELLEE.

This
is an appeal by the plaintiff-appellant, Alfonso G. Lopez, from an
order of the Court of First Instance of Manila, dated January 25, 1962,
dismissing his complaint against the defendant-appellee, Filipinas
Compañia de Seguros.

Prior to April 22, 1959, the plaintiff
applied with the defendant company for the insurance of his property
consisting of a Biederman truck tractor and a Winter Weils trailer from
loss or damage in the amount of P26,000.00 and P10,000.00,
respectively. In connection with the above application, the defendant
company inquired of the plaintiff the following:

“5. Has any company in respect of the insurance of any car or vehicle
(a) declined, cancelled or refused to renew your insurance?
(b) increased your premium on renewal?

To
both questions, the plaintiff answered: “none,” though the truth was at
that time, the American International Underwriters of the Philippines
(AIU) had already declined a similar application for insurance by the
plaintiff in respect of the above-described vehicles.

On
April 22, 1959, the defendant-appellee issued to the
plaintiff-appellant two Commercial Vehicle Comprehensive Policies
covering the above properties. On August 30, 1959, while the said
policies were in force, the aforementioned vehicles figured in an
accident at Bagabag, Nueva Vizcaya, resulting in the total loss of the
tractor and partial damage to the trailer. Accordingly, the plaintiff
gave notice of the same to the defendant company and made demand upon
the latter for the payment to him of P27,962.00, the total amount of
damages resulting from the accident.

On April 28, 1960, the
defendant-appellant rejected the above claim by reason of, among
others, the claimant’s alleged “concealment of a material fact,”
namely: that the insured property previously been declined insurance by
another company.

In view of the rejection of his claim by the
defendant company, the plaintiff-appellant filed on May 27, 1960 with
the Office of the Insurance Commissioner a complaint against the said
company. On June 7, 1960, the Assistant Insurance Commission er
requested the defendant company to give its side of the above complaint
and, thereafter, or on August 1, 1960, the said official “transmitted
to the plaintiff, thru his counsel, the ‘self-explanatory letters’
dated June 12, 1960 of the American International Underwriters of the
Philippines, Inc., and June 21, 1960 of the defendant, which the said
office had received from said parties in connection with plaintiff’s
complaint, with the suggestion that in view of the reluctant attitude
of plaintiff ‘towards the company’s proposal for the matter to be
settled thru arbitration, and considering the informative facts
disclosed’ in the letter of the AIUPI, plaintiff should pursue his case
to the Court which has proper competence to resolve said matter.”

On
August 16, 1961, the plaintiff-appellant informed by letter the Office
of the Insurance Commissioner that he was willing to submit his claim
to arbitration and, in the premises, suggested that the Assistant
Insurance Commissioner be designated as the sole arbitrator of the
same, On September 1, 1960, the Insurance Commissioner informed the
plaintiff-appellant of his willingness to act as the single arbitrator,
provided that both parties to the dispute manifest in writing their
conformity thereto and to abide by the arbitrator’s award. The
defendant-appellee, on the other hand, informed the Insurance
Commissioner on September 22, 1960 that it could not consent to the
above proposal since “the claim of the plaintiff cannot be resolved by
arbitration, as recourse to arbitration referred to in the policy
contract, envisioned only differences or disputes, ‘with respect to the
amount of the company’s liability,’ and not to cases where the company
does not admit its liability to the insured.” With this rejection, the
plaintiff-appellant filed his complaint with the Court of First
Instance of Manila on September 19, 1961.

Against
the above complaint, the defendant-appellee filed on September 29, 1961
a motion to dismiss on the ground of prescription. The latter argued
that the plaintiff’s claim had already prescribed since it was not
filed within twelve months from its rejection by the insurance company
as stipulated under paragraph 9 of the General Conditions of Commercial
Vehicle Comprehensive Policy Nos. 5598 and 5599, to wit:

“If
a claim be made and rejected and an action or suit be not commenced
within twelve months after such rejection or (in case of an arbitration
taking place as provided herein) within twelve months after the
arbitrator, arbitrators, or umpire shall have made their award then the
claim shall for all purposes be deemed to have been abandoned and shall
not thereafter be recovered hereunder.”

On January 25, 1962, the court a quo sustained the above motion and dismissed the complaint. Thus, the instant appeal.

The
principal issue raised in this appeal is simple: Was the complaint
filed by the plaintiff-appellant with the Office of the Insurance
Commissioner on May 27, 1960 a commencement of an “action or suit”
within the meaning and intent of general condition quoted above? If it
was, then the plaintiff’s complaint has not yet prescribed since the
complaint filed with the said office was made on May 27, 1960 or just
about a month after his claim was rejected by the defendant-appellee on
April 28, 1960. On the other hand, if the abovequoted condition refers
alone to an “action or suit” filed with a court of justice, as the
Order appealed from urges and as the herein appellee maintains, then,
indeed, must the finding of prescription in this incident be upheld.
For, while the plaintiff’s claim was rejected on April 28, 1960 by the
insurance company, the “action or suit” thereon with a court of justice
was filed some 17 months later, September 19, 1961.

We find for the appellee.

In 1 Moran 86 (1963 ed.), the following jurisprudence is expressed:

“Action is the act by which one sues another in a court of justice
for the enforcement or protection of a right, or the prevention or
redress of a wrong. Special proceeding is the act by which one seeks to
establish the status or right of a party, or a particular facto Hence,
an action is distinguished from special proceeding in that the former
is a formal demand of a right by one against another, while the latter
is but a petition for a declaration of a status, right or fact.”
(Italics supplied).

The above distinction
was laid down in connection with the definition of “action” in Rule 2,
Section 1 of the Rules of Court that:

“SEC. 1. Action defined.—Action means an ordinary suit in a Court of Justice
by which one party prosecutes another for the enforcement or protection
of a right, or the prevention or redress of a wrong.” (Italics
supplied).

Also, in 1 Am. Jur. 407, as cited in Francisco, Civil Procedure, p. 91, a suit is defined as:

“Suit is the prosecution or pursuit of some claim or demand in a court of justice, or any proceeding in a court of justice in which a plaintiff pursues his remedy to recover a right or claim.” (Italics supplied)

Upon
the authorities, therefore, it is settled that the terms “action” and
“suit” are synonymous. Moreover, it is clear that the determinative or
operative fact which converts a claim into an “action or suit” is the
filing of the same with a “court of justice.” Filed elsewhere, as with
some other body or office not a court of justice, the claim may not
properly be categorized under either term.

Apart
from the foregoing, however, there is yet one other reason why the
appellant’s recourse to the Office of the Insurance Commissioner could
not have been an “action or suit” which could have halted the running
of the prescriptive period stipulated in the insurance policies
involved. An “action or suit” is essentially “for the enforcement or
protection of a right, or the prevention or redress of a wrong.” (Rule
2, Sec. 1, Rules of Court). There is nothing in the Insurance Law, Act
No. 2427, as amended, nor in any of its allied legislations, which
empowers the Insurance Commissioner to adjudicate on disputes relating
to an insurance company’s liability to an insured under a policy issued
by the former to the latter. The validity of an insured’s claim under a
specific policy, its amount, and all such other matters as might
involve the interpretation and construction of the insurance policy,
are issues which only a regular court of justice may resolve and
settle. Consequently, the complaint filed by the appellant herein with
the Office of the Insurance Commission oould not have been an “action
or suit.”

The other assignments of error in the appellant’s
brief spring from or are consequences of the latter’s view that the
claim be filed with the Office of the Insurance Commissioner was an
“action or suit” within the contemplation of paragraph 9 of the general
condition earlier quoted. With our ruling above, therefore, the
necessity to pass on them becomes inconsequential.

Wherefore, the order appealed from is hereby affirmed, with costs.

Bengzon, C.J., Bautista Angelo, Concepcion, Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., and Zaldivar, JJ., concur.