Ong Lim Sing Jr. vs. FEB Leasing & Finance Corporation G.R. no. 168115, J ne 8, !

""# Facts: On March 9, 1995, FEB Leasing and Finance Corporation entered into a lease of equipment and motor ehicles !ith "#L Food $roducts% On the same date, #icente Ong Lim &ing, "r% e'ecuted an (ndi idual )uarant* +greement !ith FEB to secure the prompt and faithful performance of the terms and conditions of the aforesaid lease agreement% Corresponding Lease &chedules !ith ,eli er* and +cceptance Certificates o er the equipment and motor ehicles formed part of the agreement% +ss part of the terms of the agreement, "#L should pa* FEB an aggregate gross monthl* rental of $1-., /9/%..% &u0sequentl*, "#L defaulted in the pa*ment of the monthl* rentals% FEB sent a letter to "#L demanding pa*ment of the amount of de0t 0ut "#L failed to pa*% On ,ecem0er 1, 2..., FEB filed a Complaint !ith the 3egional 4rial Court of Manila for sum of mone*, damages, and reple in against "#L and Lim% (n their ans!er, "#L and Lim admitted the e'istence of the lease agreement 0ut asserted that it is in realit* a sale of equipment on installment 0asis, !ith FEB acting as the financier% 4he trial court ruled in fa or of "#L and Lim and stressed the contradictor* terms found in the lease agreement% 4he trial court stated, among others, that if "#L and Lim !ere to 0e regarded as onl* a lessee, logicall* the lessor !ho asserts o!nership !ill 0e the one directl* 0enefited or in5ured and therefore the lessee is not supposed to 0e the assured as he has no insura0le interest% FEB appealed and later the the Court of +ppeals re ersed and set aside the trial court6s decision% (ssue: 7hether or not the Court of +ppeals erred in ruling that the petitioner is a lessee !ith insura0le interest o er the su05ect personal propert*% 8eld: 9es% 4he stipulation in &ection 1/ of the lease contract, that the equipment shall 0e insured at the cost and e'pense of the lessee against loss, damage, or destruction from fire, theft, accident, or other insura0le ris: for the full term of the lease, is a 0inding and alid stipulation% $etitioner, as a lessee, has an insura0le interest in the equipment and motor ehicles leased% &ection 1- of the (nsurance Code pro ides that the measure of an insura0le interest in propert* is the e'tent to !hich the insured might 0e damnified 0* loss or in5ur* thereof% (t cannot 0e denied that "#L !ill 0e directl* damnified in case of loss, damage, or destruction of an* of the properties leased%