Geagonia v.

Court of Appeals
G.R. No. 114427, 6 February 1995, 241 SCRA 152
FACTS:

Geagonia, owner of a store, obtained from Country Bankers fire insurance policy for P100,000.00. The 1
year policy and covered thes tock trading of dry goods. The policy noted the requirement that The
insured shall give notice to the Company of any insurance or insurances already effected, or which may
subsequently be effected, covering any of the property or properties consisting of stocks in trade, goods
in process and/or inventories only hereby insured, and unless notice be given and the particulars of such
insurance or insurances be stated therein or endorsed in this policy pursuant to Section 50 of the
Insurance Code, by or on behalf of the Company before the occurrence of any loss or damage, all
benefits under this policy shall be deemed forfeited, provided however, that this condition shall not
apply when the total insurance or insurances in force at the time of the loss or damage is not more than
P200,000.00.”

The petitioners’ stocks were destroyed by fire. He then filed a claim which was subsequently denied
because the petitioner’s stocks were covered by two other fire insurance policies for Php 200,000 issued
by PFIC. The basis of the private respondent’s denial was the petitioner’s alleged violation of Condition 3
of the policy.

Geagonia then filed a complaint against the private respondent in the Insurance Commission for the
recovery of P100,000.00 under fire insurance policy and damages. He claimed that he knew the
existence of the other two policies. But, he said that he had no knowledge of the provision in the private
respondent’s policy requiring him to inform it of the prior policies and this requirement was not
mentioned to him by the private respondent’s agent.

The Insurance Commission found that the petitioner did not violate Condition 3 as he had no knowledge
of the existence of the two fire insurance policies obtained from the PFIC; that it was Cebu Tesing
Textiles w/c procured the PFIC policies w/o informing him or securing his consent; and that Cebu Tesing
Textile, as his creditor, had insurable interest on the stocks.
The Insurance Commission then ordered the respondent company to pay complainant the sum of
P100,000.00 with interest and attorney’s fees.
CA reversed the decision of the Insurance Commission because it found that the petitioner knew of the
existence of the two other policies issued by the PFIC.
ISSUE:
1. WON the petitioner had not disclosed the two insurance policies when he obtained the fire insurance
and thereby violated Condition 3 of the policy.
2. WON he is prohibited from recovering
HELD:
Yes. No. Petition Granted
The court agreed with the CA that the petitioner knew of the prior policies issued by the PFIC. His letter
of 18 January 1991 to the private respondent conclusively proves this knowledge. His testimony to the
contrary before the Insurance Commissioner and which the latter relied upon cannot prevail over a
written admission made ante litem motam. It was, indeed, incredible that he did not know about the
prior policies since these policies were not new or original.

Stated differently, provisions, conditions or exceptions in policies which tend to work a forfeiture of
insurance policies should be construed most strictly against those for whose benefits they are inserted,
and most favorably toward those against whom they are intended to operate.
With these principles in mind, Condition 3 of the subject policy is not totally free from ambiguity and
must be meticulously analyzed. Such analysis leads us to conclude that (a) the prohibition applies only to
double insurance, and (b) the nullity of the policy shall only be to the extent exceeding P200,000.00 of
the total policies obtained.

Furthermore, by stating within Condition 3 itself that such condition shall not apply if the total insurance
in force at the time of loss does not exceed P200,000.00, the private respondent was amenable to
assume a co-insurer’s liability up to a loss not exceeding P200,000.00. What it had in mind was to
discourage over-insurance. Indeed, the rationale behind the incorporation of “other insurance” clause in
fire policies is to prevent over-insurance and thus avert the perpetration of fraud. When a property
owner obtains insurance policies from two or more insurers in a total amount that exceeds the
property’s value, the insured may have an inducement to destroy the property for the purpose of
collecting the insurance. The public as well as the insurer is interested in preventing a situation in which
a fire would be profitable to the insured.
MALAYAN INSURANCE v. PHILIPPINES FIRST INSURANCE CO., INC. G.R. NO. 184300 July 11, 2012
Common Carrier v. Private Carrier

June 11, 2019

FACTS:

Wyeth Philippines and respondent Reputable Forwarder Services, Inc. (Reputable) had been executing a
contract of carriage, whereby the latter undertook to transport and deliver the former’s products to its
customers, dealers or salesmen.

Wyeth procured a Marine Policy from respondent Philippines First Insurance Co., Inc.

Philippines First insured Wyeth’s nutritional, pharmaceutical and other products usual or incidental to
the insured’s business while the same were being transported or shipped in the Philippines.

Under the contract, Reputable undertook to answer for “all risks with respect to the goods and shall be
liable to Wyeth, for the loss, destruction, or damage of the goods/products due to any and all causes
whatsoever, including theft, robbery, flood, storm, earthquakes, lightning, and other force majeure
while the goods/products are in transit and until actual delivery to the customers, salesmen, and dealers
of Wyeth”.
Reputable signed a Special Risk Insurance Policy (SR Policy) with petitioner Malayan for the amount of
P1,000,000.00.

During the effectivity of the Marine Policy and SR Policy, Reputable received from Wyeth 1,000 boxes of
Promil infant formula worth P2,357,582.70 to be delivered by Reputable to Mercury Drug in Libis,
Quezon City. Unfortunately, the truck carrying Wyeth s products was hijacked by about 10 armed men.
The hijacked truck was recovered two weeks later without its cargo.

Philippines First, pursuant to the Marine Policy, paid Wyeth P2,133,257.00 as indemnity. Philippines First
then demanded reimbursement from Reputable, having been subrogated to the rights of Wyeth by
virtue of the payment. The latter, however, ignored the demand.
Philippines First instituted an action for sum of money against Reputable and alleged that Reputable is a
“private corporation engaged in the business of a common carrier.”

In its answer, Reputable claimed that it is a private carrier.

The RTC rendered its Decision finding Reputable liable to Philippines First for the amount of indemnity it
paid to Wyeth, among others. In turn, Malayan was found to be liable to Reputable to the extent of the
policy coverage.

Dissatisfied, both Reputable and Malayan filed their respective appeals.

The CA sustained the ruling of the RTC.

Malayan’s MR was denied by the CA.
Hence, this petition.

ISSUE:

Whether or not Reputable is a common carrier

RULING:

The Court agrees with the RTC and CA that Reputable is a private carrier.
Under Article 1732 of the Civil Code, common carriers are persons, corporations, firms, or associations
engaged in the business of carrying or transporting passenger or goods, or both by land, water or air for
compensation, offering their services to the public.

On the other hand, a private carrier is one wherein the carriage is generally undertaken by special
agreement and it does not hold itself out to carry goods for the general public.

A common carrier becomes a private carrier when it undertakes to carry a special cargo or chartered to
a special person only. For all intents and purposes, therefore, Reputable operated as a private/special
carrier with regard to its contract of carriage with Wyeth.

The extent of a private carrier’s obligation is dictated by the stipulations of a contract it entered into,
provided its stipulations, clauses, terms and conditions are not contrary to law, morals, good customs,
public order, or public policy. “The Civil Code provisions on common carriers should not be applied
where the carrier is not acting as such but as a private carrier. Public policy governing common carriers
has no force where the public at large is not involved.”