Geagonia v CA G.R. No.

114427 February 6, 1995

Facts:
Geagonia, owner of a store, obtained from Country Bankers fire insurance policy for P100,000.00. !e 1 year policy and
co"ered t!estock trading of dry goods.
!e policy noted t!e re#uirement t!at
$%. !e insured s!all gi"e notice to t!e Company of any insurance or insurances already effected, or w!ic! may
subse#uently be effected, co"ering any of t!e property or properties consisting of stocks in trade, goods in process
and&or in"entories only !ereby insured, and unless notice be gi"en and t!e particulars of suc! insurance or insurances be
stated t!erein or endorsed in t!is policy pursuant to 'ection (0 of t!e )nsurance Code, by or on be!alf of t!e
Companybefore t!e occurrence of any loss or damage, all benefits under t!is policy s!all be deemed forfeited, pro"ided
!owe"er, t!at t!is condition s!all not apply w!en t!e total insurance orinsurances in force at t!e time of t!e loss or damage
is not more t!an P*00,000.00.$
!e petitioners+ stocks were destroyed by fire. ,e t!en filed a claim w!ic! was subse#uently denied because t!e petitioner+s
stocks were co"ered by two ot!er fire insurance policies for P!p *00,000 issued by PF)C. !e basis of t!e pri"ate
respondent-s denial was t!e petitioner-s alleged "iolation of Condition % of t!e policy.
Geagonia t!en filed a complaint against t!e pri"ate respondent in t!e )nsurance Commission for t!e reco"ery of
P100,000.00 under fire insurance policy and damages. ,e claimed t!at !e knewt!e e.istence of t!e ot!er two policies. But,
!e said t!at !e !ad no knowledge of t!e pro"ision in t!e pri"ate respondent-s policy re#uiring !im to inform it of t!e prior
policies and t!is re#uirement was not mentioned to !im by t!e pri"ate respondent-s agent.
!e )nsurance Commission found t!at t!e petitioner did not "iolate Condition % as !e !ad no knowledge of t!e e.istence of
t!e two fire insurance policies obtained from t!e PF)C/ t!at it was Cebu esing e.tiles w&c procured t!e PF)C policies w&o
informing !im or securing !is consent/ and t!at Cebu esing e.tile, as !is creditor, !ad insurable interest on t!e stocks.
!e )nsurance Commission t!en ordered t!e respondent company to pay complainant t!e sum of P100,000.00 wit! interest
and attorney+s fees.
C0 re"ersed t!e decision of t!e )nsurance Commission because it found t!at t!e petitioner knewof t!e e.istence of t!e two
ot!er policies issued by t!e PF)C.
)ssues:
1. 123 t!e petitioner !ad not disclosed t!e two insurance policies w!en !e obtained t!e fire insurance and t!ereby "iolated
Condition % of t!e policy.
*. 123 !e is pro!ibited from reco"ering
,eld: 4es. 3o. Petition Granted
5atio:
1. !e court agreed wit! t!e C0 t!at t!e petitioner knew of t!e prior policies issued by t!e PF)C. ,is letter of 16
7anuary 1881 to t!e pri"ate r
Geagonia v CA G.R. No. 114427 February 6, 1995
Facts:
Geagonia, owner of a store, obtained from Country Bankers fire insurance policy for P100,000.00. !e 1 year policy and
co"ered t!estock trading of dry goods.
!e policy noted t!e re#uirement t!at
$%. !e insured s!all gi"e notice to t!e Company of any insurance or insurances already effected, or w!ic! may
subse#uently be effected, co"ering any of t!e property or properties consisting of stocks in trade, goods in process
and&or in"entories only !ereby insured, and unless notice be gi"en and t!e particulars of suc! insurance or insurances be
stated t!erein or endorsed in t!is policy pursuant to 'ection (0 of t!e )nsurance Code, by or on be!alf of t!e
Companybefore t!e occurrence of any loss or damage, all benefits under t!is policy s!all be deemed forfeited, pro"ided
!owe"er, t!at t!is condition s!all not apply w!en t!e total insurance orinsurances in force at t!e time of t!e loss or damage
is not more t!an P*00,000.00.$
!e petitioners+ stocks were destroyed by fire. ,e t!en filed a claim w!ic! was subse#uently denied because t!e petitioner+s
stocks were co"ered by two ot!er fire insurance policies for P!p *00,000 issued by PF)C. !e basis of t!e pri"ate
respondent-s denial was t!e petitioner-s alleged "iolation of Condition % of t!e policy.espondent conclusi"ely pro"es t!is
knowledge. ,is testimony to t!e contrary before t!e )nsurance Commissioner and w!ic! t!e latter relied upon cannot
pre"ail o"er a written admission made ante litem motam. )t was, indeed, incredible t!at !e did not know about t!e prior
policies since t!ese policies were not new or original.
*. 'tated differently, pro"isions, conditions or e.ceptions in policies w!ic! tend to work a forfeiture of insurance
policies s!ould be construed most strictly against t!ose for w!ose benefits t!ey are inserted, and most fa"orably toward
t!ose against w!om t!ey are intended to operate.
1it! t!ese principles in mind, Condition % of t!e sub9ect policy is not totally free from ambiguity and must be meticulously
analy:ed. 'uc! analysis leads us to conclude t!at ;a< t!e pro!ibition applies only to double insurance, and ;b< t!e nullity of
t!e policy s!all only be to t!e e.tent e.ceeding P*00,000.00 of t!e total policies obtained.
Furt!ermore, by stating wit!in Condition % itself t!at suc! condition s!all not apply if t!e total insurance in force at t!e time
of loss does not e.ceed P*00,000.00, t!e pri"ate respondent was amenable to assume a co=insurer-s liability up to a loss not
e.ceeding P*00,000.00. 1!at it !ad in mind was to discourage o"er=insurance. )ndeed, t!e rationale be!ind t!e
incorporation of $ot!er insurance$ clause in fire policies is to pre"ent o"er=insurance and t!us a"ert t!e perpetration of
fraud. 1!en a property owner obtains insurance policies from two or more insurers in a total amount t!at e.ceeds t!e
property-s "alue, t!e insured may !a"e an inducement to destroy t!e property for t!e purpose of collecting t!e insurance.
!e public as well as t!e insurer is interested in pre"enting a situation in w!ic! a fire would be profitable to t!e insured.
Gaisano v Insurance G.R. No. 14789 !une 8, 2""6
7. >artine:
Facts:
)>C and ?e"i 'trauss ;P!ils.< )nc. ;?'P)< separately obtained from respondent fire insurancepolicies wit! book debt
endorsements. !e insurance policies pro"ide for co"erage on $book debts in connection wit! ready=made clot!ing
materials w!ic! !a"e been sold or deli"ered to "arious customers and dealers of t!e )nsured anyw!ere in t!e P!ilippines.$
!e policies defined book debts as t!e $unpaid account still appearing in t!e Book of 0ccount of t!e )nsured @( days after
t!e time of t!e loss co"ered under t!is Policy.$ !e policies also pro"ide for t!e following conditions:
1. 1arranted t!at t!e Company s!all not be liable for any unpaid account in respect of t!e merc!andise sold and deli"ered
by t!e )nsured w!ic! are outstanding at t!e date of loss for a period in e.cess of si. ;A< mont!s from t!e date of t!e co"ering
in"oice or actual deli"ery of t!e merc!andise w!ic!e"er s!all first occur.
*. 1arranted t!at t!e )nsured s!all submit to t!e Company wit!in twel"e ;1*< days after t!e close of e"ery calendar mont!
all amount s!own in t!eir books of accounts as unpaid and t!us become recei"able item from t!eir customers and dealers.
Gaisano is a customer and dealer of t!e products of )>C and ?'P). 2n February *(, 1881, t!e Gaisano 'uperstore Comple.
in Cagayan de 2ro City, owned by petitioner, was consumed by fire. )ncluded in t!e items lost or destroyed in t!e fire
were stocks of ready=made clot!ing materials sold and deli"ered by )>C and ?'P).
)nsurance of 0merica filed a complaint for damages against Gaisano. )t alleges t!at )>C and ?'P) were paid for t!eir
claims and t!at t!e unpaid accounts of petitioner on t!e sale and deli"ery of ready=made clot!ing materials wit! )>C was
P*,118,*0(.00 w!ile wit! ?'P) it was P(%(,A1%.00.
!e 5C rendered its decision dismissing )nsurance-s complaint. )t !eld t!at t!e fire was purely accidental/ t!at t!e cause of
t!e fire was not attributable to t!e negligence of t!e petitioner. 0lso, it said t!at )>C and ?'P) retained owners!ip of t!e
deli"ered goods and must bear t!e loss.
!e C0 rendered its decision and set aside t!e decision of t!e 5C. )t ordered Gaisano to pay )nsurance t!e P * million and
t!e P (00,000 t!e latter paid to )>C and ?e"i 'trauss.
,ence t!is petition.
)ssues:
1. 123 t!e C0 erred in construing a fire insurance policy on book debts as one co"ering t!e unpaid accounts of )>C and
?'P) since suc! insurance applies to loss of t!e ready=made clot!ing materials sold and deli"ered to petitioner
*. 123 )>C bears t!e risk of loss because it e.pressly reser"ed owners!ip of t!e goods by stipulating in t!e sales in"oices
t!at $BiCt is furt!er agreed t!at merely for purpose of securing t!e payment of t!e purc!ase price t!e abo"e described
merc!andise remains t!e property of t!e "endor until t!e purc!ase price t!ereof is fully paid.$
%. 123 petitioner is liable for t!e unpaid accounts
@. 123 it !as been establis!ed t!at petitioner !as outstanding accounts wit! )>C and ?'P).
,eld: 3o. 4es. 4es. 4es but account wit! ?'P) unsubstantiated. Petition partly granted.
5atio:
1. 3ow!ere is it pro"ided in t!e #uestioned insurance policies t!at t!e sub9ect of t!e insurance is t!e goods sold and
deli"ered to t!e customers and dealers of t!e insured.
!us, w!at were insured against were t!e accounts of )>C and ?'P) wit! petitioner w!ic! remained unpaid @( days after
t!e loss t!roug! fire, and not t!e loss or destruction of t!e goods deli"ered.
*. !e present case clearly falls under paragrap! ;1<, 0rticle 1(0@ of t!e Ci"il Code:
05. 1(0@. Dnless ot!erwise agreed, t!e goods remain at t!e seller-s risk until t!e owners!ip t!erein is transferred to t!e
buyer, but w!en t!e owners!ip t!erein is transferred to t!e buyer t!e goods are at t!e buyer-s risk w!et!er actual deli"ery
!as been made or not, e.cept t!at:
;1< 1!ere deli"ery of t!e goods !as been made to t!e buyer or to a bailee for t!e buyer, in pursuance of t!e contract and t!e
owners!ip in t!e goods !as been retained by t!e seller merely to secure performance by t!e buyer of !is obligations under
t!e contract, t!e goods are at t!e buyer-s risk from t!e time of suc! deli"ery
!us, w!en t!e seller retains owners!ip only to insure t!at t!e buyer will pay its debt, t!e risk of loss is borne by t!e buyer.
Petitioner bears t!e risk of loss of t!e goods deli"ered.
)>C and ?'P) !ad an insurable interest until full payment of t!e "alue of t!e deli"ered goods. Dnlike t!e ci"il law concept
of res perit domino, w!ere owners!ip is t!e basis for consideration of w!o bears t!e risk of loss, in property insurance, one-s
interest is not determined by concept of title, but w!et!er insured !as substantial economic interest in t!e property.
'ection 1% of our )nsurance Code defines insurable interest as $e"ery interest in property, w!et!er real or personal, or any
relation t!ereto, or liability in respect t!ereof, of suc! nature t!at a contemplated peril mig!t directly damnify t!e insured.$
Parent!etically, under 'ection 1@ of t!e same Code, an insurable interest in property may consist in: ;a< an e.isting interest/
;b< an inc!oate interest founded on e.isting interest/ or ;c< an e.pectancy, coupled wit! an e.isting interest in t!at out of
w!ic! t!e e.pectancy arises.
0nyone !as an insurable interest in property w!o deri"es a benefit from its e.istence or would suffer loss from its
destruction. )ndeed, a "endor or seller retains an insurable interest in t!e property sold so long as !e !as any interest t!erein,
in ot!er words, so long as !e would suffer by its destruction, as w!ere !e !as a "endor-s lien. )n t!is case, t!e insurable
interest of )>C and ?'P) pertain to t!e unpaid accounts appearing in t!eir Books of 0ccount @( days after t!e time of t!e
loss co"ered by t!e policies.
%. Petitioner-s argument t!at it is not liable because t!e fire is a fortuitous e"ent under 0rticle 11E@%* of t!e Ci"il Code is
misplaced. 0s !eld earlier, petitioner bears t!e loss under 0rticle 1(0@ ;1< of t!e Ci"il Code.
>oreo"er, it must be stressed t!at t!e insurance in t!is case is not for loss of goods by fire but for petitioner-s accounts wit!
)>C and ?'P) t!at remained unpaid @( days after t!e fire. 0ccordingly, petitioner-s obligation is for t!e payment of money.
0s correctly stated by t!e C0, w!ere t!e obligation consists in t!e payment of money, t!e failure of t!e debtor to make t!e
payment e"en by reason of a fortuitous e"ent s!all not relie"e !im of !is liability. !e rationale for t!is is t!at t!e rule t!at
an obligor s!ould be !eld e.empt from liability w!en t!e loss occurs t!ru a fortuitous e"ent only !olds true w!en t!e
obligation consists in t!e deli"ery of a determinate t!ing and t!ere is no stipulation !olding !im liable e"en in case of
fortuitous e"ent. )t does not apply w!en t!e obligation is pecuniary in nature.
Dnder 0rticle 1*A% of t!e Ci"il Code, $BiCn an obligation to deli"er a generic t!ing, t!e loss or destruction of anyt!ing of t!e
same kind does not e.tinguis! t!e obligation.$ !is rule is based on t!e principle t!at t!e genus of a t!ing can ne"er peris!.
0n obligation to pay money is generic/ t!erefore, it is not e.cused by fortuitous loss of any specific property of t!e debtor.
@. 1it! respect to )>C, t!e respondent !as ade#uately establis!ed its claim. !e P % m claim !as been pro"en. !e
subrogation receipt, by itself, is sufficient to establis! not only t!e relations!ip of respondent as insurer and )>C as t!e
insured, but also t!e amount paid to settlet!e insurance claim. !e rig!t of subrogation accrues simply upon payment by t!e
insurancecompany of t!e insurance claim 5espondent-s action against petitioner is s#uarely sanctioned by 0rticle **0E of
t!e Ci"il Code w!ic! pro"ides:
0rt. **0E. )f t!e plaintiff-s property !as been insured, and !e !as recei"ed indemnity from t!e insurance company for t!e
in9ury or loss arising out of t!e wrong or breac! of contract complained of, t!e insurance company s!all be subrogated to
t!e rig!ts of t!e insured against t!e wrongdoer or t!e person w!o !as "iolated t!e contract.
0s to ?'P), respondent failed to present sufficient e"idence to pro"e its cause of action. !ere was no e"idence t!at
respondent !as been subrogated to any rig!t w!ic! ?'P) may !a"e against petitioner. Failure to substantiate t!e claim of
subrogation is fatal to petitioner-s case for reco"ery of P(%(,A1%.00.
)nsurance Case Figest: 5i:al Commercial Banking Corporation G. C0 ;1886<
G.5.3os. 1*66%% 0pril *0, 1886
?essons 0pplicable: 0ssignee ;)nsurance<
F0C':
5CBC Binondo Branc! initially granted a credit facility of P%0> to Goyu H 'ons, )nc. G24D+s applied again and
t!roug! Binondo Branc! key officer-s Dy+s and ?ao+srecommendation, 5CBC+s e.ecuti"e committee increased its
credit facility to P(0> to P80> and finally to P11E>.
0s security, G24D e.ecuted * real estate mortgages and * c!attel mortgages in fa"or of 5CBC.
G24D obtained in its name 10 insurance policy on t!e mortgaged properties from >alayan )nsurance Company, )nc.
;>)C2<. )n February 188*, !e was issued 6 insurance policies in fa"or of 5CBC.
0pril *E, 188*: 2ne of G24D+s factory buildings was burned so !e claimed against >)C2 for t!e loss w!o denied
contending t!at t!e insurance policies were eit!er attac!ed pursuant to writs of attac!ments&garnis!ments or t!at
creditors are claiming to !a"e a better rig!t
G24D filed a complaint for specific performance and damages at t!e 5C
5CBC, one of G24D+s creditors, also filed wit! >)C2 its formal claim o"er t!e proceeds oft!e insurance policies, but
said claims were also denied for t!e same reasons t!at >)C2 denied G24D+s claims
5C: Confirmed G24D+s ot!er creditors ;Drban Bank, 0lfredo 'ebastian, and P!ilippine rust Company< obtained
t!eir writs of attac!ment co"ering an aggregate amount of P1@,8%6,060.*% and ordered t!at 10 insurance policies be
deposited wit! t!e court minus t!e said amount so >)C2 deposited P(0,(0(,(8@.A0.
0not!er Garnis!ment of P6,A8A,6%6.E( was !anded down
5C: fa"ored G24D against >)C2 for t!e claim, 5CBC for damages and to pay 5CBC its loan
C0: >odified by increasing t!e damages in fa"or of G24D
)n G.5. 3o. 1*66%@, 5CBC seeks rig!t to inter"ene in t!e action between 0lfredo C. 'ebastian ;t!e creditor< and
G24D ;t!e debtor<, w!ere t!e sub9ect insurance policies were attac!ed in fa"or of 'ebastian
5C and C0: endorsements do not bear t!e signature of any officer of G24D concluded t!at t!e endorsements
fa"oring 5CBC as defecti"e.
)''DI: 1&3 5CBC as mortgagee, !as any rig!t o"er t!e insurance policies taken by G24D, t!e mortgagor, in case of t!e
occurrence of loss
,I?F: 4I'.
mortgagor and a mortgagee !a"e separate and distinct insurable interests in t!e same mortgaged property, suc! t!at
eac! one of t!em may insure t!e same property for !is own sole benefit
alt!oug! it appears t!at G24D obtained t!e sub9ect insurance policies naming itself as t!e sole payee, t!e intentions of
t!e parties as s!own by t!eir contemporaneous acts, must be gi"en due consideration in order to better ser"e t!e interest
of 9ustice and e#uity
6 endorsement documents were prepared by 0lc!ester in fa"or of 5CBC
>)C2, a sister company of 5CBC
G24D continued to en9oy t!e benefits of t!e credit facilities e.tended to it by 5CBC.
G24D is at t!e "ery least estopped from assailing t!eir operati"e effects.
!e two courts below erred in failing to see t!at t!e promissory notes w!ic! t!ey ruled s!ould be e.cluded for bearing
dates w!ic! are after t!at of t!e fire, are mere renewals of pre"ious ones
5CBC !as t!e rig!t to claim t!e insurance proceeds, in substitution of t!e property lost in t!e fire. ,a"ing assigned its
rig!ts, G24D lost its standing as t!e beneficiary of t!e said insurance policies
insurance company to be !eld liable for unreasonably delaying and wit!!olding payment of insurance proceeds, t!e
delay must be wanton, oppressi"e, or male"olent = not s!own
'ebastian+s rig!t as attac!ing creditor must yield to t!e preferential rig!ts of 5CBC o"er t!e >alayan insurance
policies as first mortgagee.
Fac#s: Petitioner spouses 3ilo C!a and 'tella Dy=C!a, as lessees entered into a lease contract wit! pri"ate respondent
CJ'Fe"elopment Corporation as lessor. 0 stipulation of t!e lease contract pro"ides t!at t!e ?essee is not allowed to insure
against fire t!e c!attels, merc!andise, te.tiles, goods and effects placed at any stall or store or space in t!e leased premises
wit!out first obtaining t!e written consent and appro"al of t!e ?essor. )f t!e ?essee "iolates t!is t!e policy is deemed
assigned and transferred to t!e ?essor for !is own benefit.
Petitioner took out a policy of fire insurance o"er t!e merc!andiseinside t!e leased premises wit! Dnited )nsurance wit!out
consent of CJ'.
2n t!e day t!e lease contract was to e.pire a fire broke out inside t!e leased premises. CJ', wrote a letter to Dnited asking
t!at t!e proceeds of t!e fire insurance be paid directly to CJ'. Dnited refused. ,ence, t!e latter filed a complaint against t!e
C!a spouses and Dnited.
5C ruled in fa"or of CJ'. C0 affirmed, !ence t!e petition.
Issue: 1!et!er or not CJ' can reco"er from t!e insurance policy.
$e%&: 3o. 'ection 16 of t!e )nsurance Code pro"ides t!at: K3ocontract or policy of insurance on property s!all be
enforceable e.cept for t!e benefit of some person !a"ing an insurable interest in t!e property insured.L
)n t!e present case, it cannot be denied t!at CJ' !as no insurable interest in t!e goods and merc!andise inside t!e leased
premises under t!e pro"isions of 'ection 1E of t!e )nsurance Code: K!e measure of an insurable interest in property is t!e
e.tent to w!ic! t!e insured mig!t be damnified by loss or in9ury t!ereof.L !erefore, CJ' cannot be "alidly a beneficiary of
t!e fire insurance policy taken by petitioner=spouses. !e insurable interest remains wit! t!e C!a spouses.
!e stipulation in t!e lease contract is "oid for being contrary to law and public policy. !is is in keeping wit! t!e pro"ision
under 'ec. *( of t!e )nsurance Code t!at: I"ery stipulation in a policy of )nsurance for t!e payment of loss, w!et!er t!e
person insured !as or !as not any interest in t!e property insured or t!at t!e policy s!all be recei"ed as proof of suc! interest
and e"ery policy e.ecuted by way of gaming or wagering is "oid.L