1. Paris-Manila Perfume Co. v. Phoenix Assurance Co.

(1926)

Facts:

 May 22, 1924: A fire insurance policy was issued by Phoenix Assurance Company, Limited
to Messrs. Paris-Manila Perfumery Co. (Peter Johnson, Prop.) for P13,000

o also insured with other insurance companies for P1,200 and P5,000 respectively

 July 4, 1924: The Perfumery was burned unknown of the cause totalling a loss
of P38.025.56

 Phoenix refused to pay nor to appoint an arbitrator stating that the policy did not
cover any loss or damage occasioned by explosion and stating that the claim was
fraudulent

 RTC: ordered Phoenix to pay P13,000

 Phoenix appealed

o The insurance policy contains:

Unless otherwise expressly stated in the policy the insurance does not cover

(h) Loss or damage occasioned by the explosion; but loss or damage by explosion of gas
for illuminating or domestic purposes in a building in which gas is not generated and which
does not form a part of any gas works, will be deemed to be loss by fire within the
meaning of this policy.

ISSUE: W/N Phoenix should be liable for the loss because there was no explosion which is an
exemption from the policy

HELD: YES.

 If it be a fact that the fire resulted from an explosion that fact, if proven, would be a
complete defense, the burden of the proof of that fact is upon the defendant, and upon
that point, there is a failure of proof

 lower court found as a fact that there was no fraud in the insurance, and that the value of
the property destroyed by the fire was more than the amount of the insurance.

3. COUNTRY BANKERS INSURANCE CORP. VS. LIANGA BAY & COMMUNITY MULTI-PURPOSE
COOPERATIVE, INC. G.R. No.136914, January 25, 2002

Facts:

Country Banker’s Insurance Corp. (CBIC) insured the building of respondent Lianga Bay and
Community Multi-Purpose Corp., Inc. against fire, loss, damage, or liability during the period
starting June 20, 1990 for the sum of Php.200,000.00. On July 1, 1989 at about 12:40 in the
morning a fire occurred. The respondent filed the insurance claim but the petition denied the
same on the ground that the building was set on fire by two NPA rebels and that such loss was an
excepted risk under par.6 of the conditions of the insurance policy that the insurance does not
cover any loss or damage occasioned by among others, mutiny, riot, military or any uprising.
Respondent filed an action for recovery of loss, damage or liability against petitioner and the Trial
Court ordered the petition to pay the full value of the insurance.

Issue: Whether or not the insurance corporation is exempted to pay based on the exception
clause in the insurance policy.

Held: The Supreme Court held that the insurance corporation has the burden of proof to show
that the loss comes within the purview of the exception or limitation set-up. But the insurance
corporation cannot use a witness to prove that the fire was caused by the NPA rebels on the
basis that the witness learned this from others. Such testimony is considered hearsay and may
not be received as proof of the truth of what he has learned. The petitioner, failing to prove the
exception, cannot rely upon on exemption or exception clause in the fire insurance policy. The
petition was granted.

4. Malayan Insurance Co., Inc. vs. CA [G.R. No. L-36413, 26 September 1988]

Facts:

Malayan Insurance Co. Inc. (MALAYAN) issued a Private Car Comprehensive Policy covering a
Willys jeep. The insurance coverage was for "own damage" not to exceed P600.00 and "third-
party liability" in the amount of P20,000.00. During the effectivity of the insurance policy, , the
insured jeep, while being driven by one Juan P. Campollo an employee of the respondent San
Leon Rice Mill, Inc., (SAN LEON) collided with a passenger bus belonging to the respondent
Pangasinan Transportation Co., Inc. (PANTRANCO) at the national highway in Barrio San Pedro,
Rosales, Pangasinan, causing damage to the insured vehicle and injuries to the driver, Juan P.
Campollo, and the respondent Martin C. Vallejos, who was riding in the ill-fated jeep.

Martin C. Vallejos filed an action for damages against Sio Choy, Malayan Insurance Co., Inc. and
the PANTRANCO before the Court of First Instance of Pangasinan. The trial court rendered
judgment holding Sio Choy, SAN LEON, and MALAYAN jointly and severally liable. However,
MALAYAN’s liability will only be up to P20,000.

On appeal, CA affirmed the decision of the trial court. However, it ruled that SAN LEON has no
obligation to indemnify or reimburse the petitioner insurance company for whatever amount it
has been ordered to pay on its policy, since the San Leon Rice Mill, Inc. is not a privy to the
contract of insurance between Sio Choy and the insurance company.

MALAYAN appealed to the SC by way of review on certiorari.

Issues:

(1) Whether or not MALAYAN is solidarily liable to Vallejos, along with Sio Choy and SAN LEON

(2) Whether or not MALAYAN is entitled to be reimbursed by SAN LEON for whatever amount
petitioner has been adjudged to pay respondent Vallejos on its insurance policy.

Held:

(1) Only Sio Choy and SAN LEON are solidarily liable to Vallejos for the award of damages. Sio
Choy is liable as owner of the jeep pursuant to Article 2184, while SAN LEON is liable as the
employer of the driver of the jeep at the time of the accident pursuant to Art 2180.

MALAYAN’s liability, however, arose only out of the insurance policy with Sio Choy. Petitioner as
insurer of Sio Choy, is liable to respondent Vallejos, but it cannot, as incorrectly held by the trial
court, be made "solidarily" liable with the two principal tortfeasors namely respondents Sio Choy
and SAN LEON.

(2) MALAYAN is entitled to be reimbursed. Upon payment of the loss, the insurer is entitled to be
subrogated pro tanto to any right of action which the insured may have against the third person
whose negligence or wrongful act caused the loss. When the insurance company pays for the
loss, such payment operates as an equitable assignment to the insurer of the property and all
remedies which the insured may have for the recovery thereof. That right is not dependent
upon , nor does it grow out of any privity of contract or upon written assignment of claim, and
payment to the insured makes the insurer assignee in equity.

5. Vda. De Gabriel v. CA, G.R. No. 103883 November 14, 1996

FACTS:

Marcelino Gabriel was employed by Emerald Construction & DevelopmentCorporation (Emerald

Construction for brevity) at its construction project in Iraq. He wascovered by a personal accident
insurance in the amount of P100,000.00 under a grouppolicy procured from Fortune Insurance &
Surety Company (Fortune Insurance for brevity)by Emerald Construction for its overseas workers.
The insured risk was for bodily injurycaused by violent accidental external and visible means
which injury would solely andindependently of any other cause result in death or disability.On 22
May 1982, within the life of the policy, Gabriel died in Iraq. On 12 July 1983,Emerald Construction
reported Gabriel’s death to Fortune Insurance by telephone. Amongthe documents thereafter
submitted to Fortune Insurance were a copy of the deathcertificate issued by the Ministry of
Health of the Republic of Iraq which stated that anautopsy report by the National Bureau of
Investigation was conducted to the effect that dueto advanced state of postmortem
decomposition, the cause of death of Gabriel couldnot be determined.

Because of this development Fortune Insurance ultimately denied the claim of Emerald
Construction on the ground of prescription. Gabriel’s widow, Jacqueline Jimenez,went to the to
the lower court. In her complaint against Emerald Construction and FortuneInsurance, she
averred that her husband died of electrocution while in the performance of his work.Fortune
Insurance alleged that since both the death certificate issued by the IraqiMinistry of Health and
the autopsy report of the NBI failed to disclose the cause of Gabriel’sdeath, it denied liability
under the policy. In addition, private respondent raised the defenseof prescription, invoking
Section 384 of the Insurance Code.

ISSUE: WON Jacqueline Jimenez vda. de Gabriel’s claim against Fortune Insurance should
bedenied on the ground of prescription

HELD:

Yes. Section 384 of the Insurance Code provides: Sec. 384. Any person having any claim upon
the policy issued pursuant to this chapter shall, without any unnecessary delay, present to the
insurance company concerned a written notice of claim setting forth the nature, extent and
duration of the injuries sustained as certified by a duly licensed physician. Notice of claim must
be filed within six months from date of the accident, otherwise, the claim shall be deemed
waived. Action or suit for recovery of damage due to loss or injury must be brought, in proper
cases, with the Commissioner or the Courts within one year from denial of the claim, otherwise,
the claimants right of action shall prescribe. The notice of death was given to Fortune Insurance,
concededly, more than a year after the death of vda. de Gabriel’s husband. Fortune Insurance, in
invoking prescription, was not referring to the one-year period from the denial of the claim within
which to file an action against an insurer but obviously to the written notice of claim that had to
be submitted within six months from the time of the accident.

Vda. de Gabriel argues that Fortune Insurance must be deemed to have waived its right to show
that the cause of death is an excepted peril, by failing to have its answers duly verified. It is true
that a matter of which a written request for admission is made shall be deemed impliedly
admitted unless, within a period designated in the request, which shall not be less than 10 days
after service thereof, or within such further time as the court may allow on motion and notice,
the party to whom the request is directed serves upon the party requesting the admission a
sworn statement either denying specifically the matters of which an admission is requested or
setting forth in detail the reasons why he cannot truthfully either admit or deny those matters;
however, the verification, like in most cases required by the rules of procedure, is a formal, not
jurisdictional, requirement, and mainly intended to secure an assurance that matters which are
alleged are done in good faith or are true and correct and not of mere speculation.

When circumstances warrant, the court may simply order the correction of unverified pleadings
or act on it and waive strict compliance with the rules in order that the ends of justice may
thereby be served. In the case of answers to written requests for admission particularly, the
court can allow the party making the admission, whether made expressly or deemed to have
been made impliedly, to withdraw or amend it upon such terms as may be just. The insurance
policy expressly provided that to be compensable, the injury or death should be caused by
violent accidental external and visible means. In attempting to prove the cause of her husband’s
death, all that vda. de Gabriel could submit were a letter sent to her by her husband’s co-worker,
stating that Gabriel died when he tried to haul water out of a tank while its submerged motor
was still functioning, and vda. de Gabriel’s sworn affidavit. The said affidavit, however, suffers
from procedural infirmity as it was not even testified to or identified by vda. de Gabriel herself.
This affidavit therefore is a mere hearsay under the law.

In like manner, the letter allegedly written by the deceased’s co-worker which was never
identified to in court by the supposed author, suffers from the same defect as the affidavit of
vda. de Gabriel. Not one of the other documents submitted, to wit, the POEA decision, the death
certificate issued by the Ministry of Health of Iraq and the NBI autopsy report, could give any
probative value to vda. de Gabriel’s claim. The POEA decision did not make any categorical
holding on the specific cause of Gabriel’s death. In summary, evidence is utterly wanting to
establish that the insured suffered from an accidental death, the risk covered by the policy.

6. FGU Insurance Corporation v. CA (2005)

Lessons Applicable: Loss caused by negligence of the insured (Insurance)

FACTS:

 Anco Enterprises Company (ANCO), a partnership between Ang Gui and Co To, was
engaged in the shipping business operating two common carriers

o M/T ANCO tugboat

o D/B Lucio barge - no engine of its own, it could not maneuver by itself and had to be
towed by a tugboat for it to move from one place to another.

 September 23 1979: San Miguel Corporation (SMC) shipped from Mandaue City, Cebu, on
board the D/B Lucio, for towage by M/T ANCO:

o 25,000 cases Pale Pilsen and 350 cases Cerveza Negra - consignee SMC’s Beer
Marketing Division (BMD)-Estancia Beer Sales Office, Estancia, Iloilo

o 15,000 cases Pale Pilsen and 200 cases Cerveza Negra - consignee SMC’s BMD-San
Jose Beer Sales Office, San Jose, Antique

 September 30, 1979: D/B Lucio was towed by the M/T ANCO arrived and M/T ANCO left the
barge immediately

o The clouds were dark and the waves were big so SMC’s District Sales Supervisor,
Fernando Macabuag, requested ANCO’s representative to transfer the barge to a
safer place but it refused so around the midnight, the barge sunk along
with 29,210 cases of Pale Pilsen and 500 cases of Cerveza Negra totalling
to P1,346,197

 When SMC claimed against ANCO it stated that they agreed that it would not be liable for
any losses or damages resulting to the cargoes by reason of fortuitous event and it was
agreed to be insured with FGU for 20,000 cases or P858,500

 ANCO filed against FGU

o FGU alleged that ANCO and SMC failed to exercise ordinary diligence or the
diligence of a good father of the family in the care and supervision of the cargoes

 RTC: ANCO liable to SMC and FGU liable for 53% of the lost cargoes

 CA affirmed

ISSUE: W/N FGU should be exempted from liability to ANCO for the lost cargoes because of a
fortuitous event and negligence of ANCO
HELD: YES. Affirmed with modification. Third-party complainant is dismissed.

 Art. 1733. Common carriers, from the nature of their business and for reasons of public
policy are bound to observe extraordinary diligence in the vigilance over the goods and for
the safety of the passengers transported by them, according to all the circumstances of
each case.

Such extraordinary diligence in vigilance over the goods is further expressed in Articles 1734,
1735, and 1745 Nos. 5, 6, and 7 . . .

 Art. 1734. Common carriers are responsible for the loss, destruction, or deterioration of
the goods, unless the same is due to any of the following causes only:

(1) Flood, storm, earthquake, lightning, or other natural disaster or calamity;

. . .

 Art. 1739. In order that the common carrier may be exempted from responsibility, the
natural disaster must have been the proximate and only cause of the loss. However, the
common carrier must exercise due diligence to prevent or minimize loss before, during
and after the occurrence of flood, storm, or other natural disaster in order that the
common carrier may be exempted from liability for the loss, destruction, or deterioration
of the goods . . .

 Caso fortuito or force majeure

o extraordinary events not foreseeable or avoidable, events that could not be

foreseen, or which though foreseen, were inevitable

o not enough that the event should not have been foreseen or anticipated, as is
commonly believed but it must be one impossible to foresee or to avoid - not in this
case

 other vessels in the port of San Jose, Antique, managed to transfer to another
place

 To be exempted from responsibility, the natural disaster should have been the proximate
and only cause of the loss. There must have been no contributory negligence on the part
of the common carrier.

o there was blatant negligence on the part of M/T ANCO’s crewmembers, first in
leaving the engine-less barge D/B Lucio at the mercy of the storm without the
assistance of the tugboat, and again in failing to heed the request of SMC’s
representatives to have the barge transferred to a safer place

 When evidence show that the insured’s negligence or recklessness is so gross as to be

sufficient to constitute a willful act, the insurer must be exonerated.

 ANCO’s employees is of such gross character that it amounts to a wrongful act which must
exonerate FGU from liability under the insurance contract

o both the D/B Lucio and the M/T ANCO were blatantly negligent

7. Sun v CA G.R. No. 92383 July 17, 1992

Facts:

Lim accidentally killed himself with his gun after removing the magazine, showing off, pointing
the gun at his secretary, and pointing the gun at his temple. The widow, the beneficiary, sued
the petitioner and won 200,000 as indemnity with additional amounts for other damages and
attorney’s fees. This was sustained in the Court of Appeals then sent to the Supreme court by the
insurance company.

Issue:
1. Was Lim’s widow eligible to receive the benefits?

2. Were the other damages valid?

Held:

1. Yes 2. No

Ratio: 1. There was an accident.

De la Cruz v. Capital Insurance says that "there is no accident when a deliberate act is performed
unless some additional, unexpected, independent and unforeseen happening occurs which
produces or brings about their injury or death." This was true when he fired the gun.

Under the insurance contract, the company wasn’t liable for bodily injury caused by attempted
suicide or by one needlessly exposing himself to danger except to save another’s life.

Lim wasn’t thought to needlessly expose himself to danger due to the witness testimony that he
took steps to ensure that the gun wasn’t loaded. He even assured his secretary that the gun was
loaded.

There is nothing in the policy that relieves the insurer of the responsibility to pay the indemnity
agreed upon if the insured is shown to have contributed to his own accident.

2. “In order that a person may be made liable to the payment of moral damages, the law
requires that his act be wrongful. The adverse result of an action does not per se make the act
wrongful and subject the act or to the payment of moral damages. The law could not have meant
to impose a penalty on the right to litigate; such right is so precious that moral damages may not
be charged on those who may exercise it erroneously. For these the law taxes costs.”

If a party wins, he cannot, as a rule, recover attorney's fees and litigation expenses, since it is
not the fact of winning alone that entitles him to recover such damages of the exceptional
circumstances enumerated in Art. 2208. Otherwise, every time a defendant wins, automatically
the plaintiff must pay attorney's fees thereby putting a premium on the right to litigate which
should not be so. For those expenses, the law deems the award of costs as sufficient.”

8. G.R. No. L-35848 November 22, 1932

THE EAST FURNITURE INC.,

plaintiff-appellant,vs.

THE GLOBE & RUTGERS FIRE INSURANCE CO. OF NEW YORK,

defendant-appellee.

--------------------------------------------G.R. No. L-35849 November 22, 1932THE EAST FURNITURE INC.,

plaintiff-appellant,vs.

COMMERCIAL UNION ASSURANCE COMPANY, LTD.,

defendant-appellee.

--------------------------------------------G.R. No. L-35850 November 22, 1932THE EAST FURNITURE INC.,

plaintiff-appellant,vs.

THE CONTINENTAL INSURANCE CO. OF NEW YORK,

defendant-appellee.

Facts:

Plaintiff is a duly registered partnership engaged in the sale of furniture; that the defendant is
acompany engaged in the insurance business. Plaintiff insured against fire the articles existing
inits establishment. On March 2, 1929, a fire broke out in plaintiff's establishment, as a result of
which the insured articles therein found were destroyed by the fire.Defendants defenses are:(1)
that the fire in question was of intentional origin; (2) that the claimsof loss presented by the
plaintiff were false and fraudulent; (3) that the furniture in question had been mortgaged by the
plaintiff to the Manila Finance and Discount Corporation, so that at thetime of the fire the plaintiff
was not the only party interested therein, contrary to therepresentations made in its claims of
loss; and (4) that the plaintiff violated one of the conditionsof the policies by refusing to furnish
the defendants with a physical inventory of the contents of its store at the time of the fire.

By agreement of the parties the three cases were tried jointly who after the trial found that
theclaims presented by the plaintiff were notoriously fraudulent, and, accordingly,
sustaineddefendant's second special defense and dismissed the complaint in each of the three
cases.Hence, this petition.

Issue:W/N fire was of intentional originW/N the claim of loss were fraudulent?

Ruling:

Fire of Intentional Origin

We are thus led to the conclusion that defendants' first special defense is well founded — that
thefire in question was of intentional origin and was caused with the connivance of the plaintiff.
Neither the interest of the justice nor public policy would be promoted by an omission of the
courts to expose and condemn incendiarism once the same is established by competent
evidence.It would tend to encourage rather than suppress that great public menace if the courts
do notexpose the crime to public condemnation when the evidence in a case like the present
shows thatit has really been committed.

Fraudulent claim of loss. We may also consider the damage caused by the fire in relation with
defendant's second specialdefense that plaintiff's claims of loss were false and fraudulent.To
each of the proofs of loss which the plaintiff presented to the respective insurance companies
four days after the fire was attached an inventory of the furniture claimed to have been in the
building at the time of the fire. This inventory contains 506 pieces of furniture and3,700 board
feet of lumber of the alleged total value of P52,061.99. This amount was the totalloss claimed to
have been suffered by the plaintiff, although we note that in its complaints inthese cases
amended it is conceded that some furniture of the value of about P5,000 was saved.

Regardless of any difference of opinion as to the value of the insured furniture and the extent of
the damage caused thereto by the fire in question, the fact that the insured only
hadapproximately 202 pieces of furniture in the building at the time of the fire and sought
tocompel the insurance companies to pay for 506 pieces conclusively shows that its claim was
nothonestly conceived. The trial court's conclusion that said claim is notoriously fraudulent, is
correct. Condition 12 of each of the insurance policies sued upon provides that "if the claim be
inany respect fraudulent, or if any false declaration be made or used in support thereof, or if
anyfraudulent means or devices are used by the Insured or anyone acting on his behalf to obtain
any benefit under this policy; or, if the loss or damage be occasioned by the wilful act, or with
theconnivance of the Insured, — all benefit under this policy shall be forfeited."

9. G.R. No. L-19851 June 29, 1965

YU BAN CHUAN, plaintiff-appellant,

vs.
FIELDMEN'S INSURANCE CO., INC., ET AL., defendants-appellants.

Facts:

Plaintiff Yu Ban Chuan began his business enterprise under the name of "CMC Trading." The
plaintiff insured against fire the stock merchandise contained therein with defendant Fieldmen's
Insurance Co. an " open" policy limiting the insurer's liability to the amount of P200,000 for a
period of one (1) year; that plaintiff again insured against fire the same stock of merchandise
covered by Fieldmen's policy with defendant Paramount Surety & Insurance Co. an "open" policy
limiting liability thereunder to P140,000 for a one-year period; Thereafter, Fieldmen's agreed to
transfer the coverage of its insurance policy to plaintiff's different store where he transferred;
Paramount also agreed to have the coverage of its insurance policy transferred to the same new
premises and acknowledged the existence of its co-insurance with Fieldmen's; Fieldmen's also
acknowledged its co-insurance with Paramount; while both insurance policies were in full force
and effect, plaintiff's business establishment, was totally destroyed by fire.

The next day after the occurrence of the fire, plaintiff verbally notified the respective agents of
the defendants-insurers of such incident; and on the same day, plaintiff and H. H. Bayne
Adjustment Co. and Manila Adjustment Co., adjusters of defendants Fieldmen's and Paramount,
respectively, executed "non-waiver" agreements for the purpose of determining the
circumstances of the fire and the value or amount of loss and damage to the merchandise
insured under said policies. Pursuant to such agreements, H. H. Bayne Adjustment Co. sent a
letter to plaintiff, and Manila Adjustment Co. sent its letter, requiring the plaintiff to submit
certain papers and documents. Plaintiff gave a written notice of the occurrence of the fire to the
defendants, and, in answer to the letters of the adjusters, plaintiff submitted his separate formal
fire claims, together with some of the supporting papers required therein. Because of plaintiff's
non-compliance or failure to submit the required documents and the adjusters' demand in
subsequent letters that the insured submit additional papers, the adjusters and plaintiff engaged
in an exchange of communications, until finally the defendants rejected plaintiff's claims, and
denied liability under their respective policies, evidently upon their respective adjusters'
recommendations.

Issue: W/N the insurer is liable.

Held:

NO. The plaintiff adheres to the inventory as the immaculate basis for the actual worth of stocks
that were burned, on the ground that it was made from actual count, and in compliance with law.
But this inventory is not binding on the defendants, since it was prepared without their
intervention. It is well to note that plaintiff had every reason to show that the value of his stock
of goods exceeded the amount of insurance that he carried. And the inventory, having been
made prior to the fire, was no proof of the existence of these goods at the store when the fire
occurred. True, there were merchandise that were actually destroyed by fire. But when fraud is
conceived, what is true is subtly hidden by the schemer beneath proper and legal appearances,
including the preparation of the inventory.

The filing of collection suits for unpaid purchases against Yu Ban Chuan, however valid these may
be, do not legitimize his fraudulent claim against the insurers in the present case, nor show that
the goods allegedly delivered were at the store when the fire occurred. It is markworthy that in
some instances the debts are only attested by certifications from the creditors.

The plaintiff, Yu Ban Chuan, is a Chinese who came to this country in 1948. His combined income
from 1956 through 1958 amounted to only P10,000. Yet in 1959 he appeared as running a,
business of his own worth almost half a million pesos. The source of the investment, accordingly
to him, were unsecured loans in the fantastic sum of P224,000.00. From these circumstances,
and the facts herein before stated, it is plain that no credence can be given to plaintiff's claims.

10. Yu Cua v. South British Insurance Co.

11. G.R. No. L-22498 December 16, 1924

A.M. TUASON, plaintiff-appellant,

vs.
NORTH CHINA INSURANCE COMPANY, LTD.

Facts:
About midnight of the 28th of January, 1922, a fire broke out in the Vanity Fair, a merchantile
establishment owned by A.M. Tuason, devoted to the sale of dry goods and embroidery and to
conducting a massage and manicuring parlor and tea room. Due to the promptness and
efficiency of the Manila fire department, the five was placed under control before it had done
more than destroy a part of the building with its equipment and merchandise. The presence of
dry goods saturated with spirits of turpentine and other very suspicious circumstances, resulted
in J. Lorenzo, deputy chief of the fire department, reporting that the cause of the fire was
"Incendiary ... international."

At that time, the Vanity Fair was insured with the Liverpool & London & Globe Insurance
Company, Ltd., and the North China Insurance Company, Ltd., under seven policies, totaling
P200,000. Five of these policies had been taken out by Mr. Tuason on December 14, 1921, and
two had been taken out on January 16, 1922.

Mr. Tuason laid claim to P191,336.74. When said claim was rejected by the insurance companies.
The principal defenses set up by the defendants were, first, that all benefit under the policies had
been forfeited because false, fraudulent, and fictitious declarations had been made the devices
to obtain payment; and, second, that the five was caused by the willful act of the plaintiff and
those instigated by an in connivance with him.

Issue: W/N the insurers are liable.

Held:

No. The difference between the formal claim of approximately P190,000, or, deducting the
amount asked for the furniture, of over P170,000, and P30,000, the top figure conceded by
impartial witnesses, is so great as to indicate false statements made intentionally and willfully.
Such facts bring into view the twelfth condition of the policies providing: "If the claim be in any
respect fraudulent, or if any false declaration be made or used in support thereof, or if any
fraudulent means or devices are used by the insured or anyone 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 the
connivance of the insured ... all benefit under this policy shall be forfeited." This clause, with its
unfortunate relation to the proven facts, calls for the application of the doctrine that false and
material statements made with an intent to deceive or defraud, avoid the insurance policies.

12. [G.R. No. L-15551. November 29, 1960.]

DAVID CONSUNJI and FREDESVINDA A. CONSUNJI, plaintiffs and appellees, v. THE

MANILA PORT SERVICE

Facts:

David Consunji and Fredesvinda A. Consunji were consignees of 247 cartons of medical supplies
unloaded at the Port of Manila from the United States. As arrastre operator, the Manila Port
Service took charge of the merchandise, and in due course delivered to plaintiffs or their agent
243 cartons, thereby incurring a shortage of four (4) cartons.

Wherefore this complaint in the Manila municipal court for the sum of P460.38 representing the
invoice value of the undelivered goods, plus damages and attorneys fees totalling P620.36.

The defense rested mainly on the failure of plaintiffs to file a claim for the shortage within 15
days, as provided in its Management Contract with the Bureau of Customs, which reads
partly:jgc:chanrobles.com.ph

". . . In any event the contractor shall be relieved and released of any and all responsibility or
liability for loss, damage, misdelivery and or non-deliver of goods, unless suit in the Court of
proper jurisdiction is brought within a period of one (1) year from the date of the discharge of the
goods, or from the date when the claim for the value of such goods have been rejected or denied
by the contractor, provided that such claim shall have been filed with the Contractor within 15
(fifteen) days from the date of the discharge of the last package from the carrying vessel."

Issue: W/N the Consunji can claim.

Held:

NO. Carriers or depositories sometimes require presentation of claims within a short time after
delivery as a condition precedent to their liability for losses. Such requirement is not empty
formalism. It has a definite purpose, i.e. to afford the carrier or depository a reasonable
opportunity and facilities to check the validity of the claims while the facts are still fresh in the
minds of the persons who took part in the transaction and the documents are still available. Now,
we see no reason why Manila Port Service — for whose benefit the provision was evidently
inserted — should require prompt presentation of claim in one instance, while waiving it in the
other.

In this connection, realize the seeming inequity of applying this 15-day proviso where the
consignee comes to know the damage or loss only after the lapse of such 15-day period, for
instance, where delivery by the contractor takes place 16 days after discharge of the last
package from the vessel. And it might be unfair to apply the limitation where the claimant comes
to know of such condition precedent only after the 15-day period. But such exceptional
considerations do not come presently into play, plaintiffs having asserted none of them. On the
contrary, impliedly admitting knowledge of both the condition and the shortage within the 15-
day time , they stood on the proposition, as stated, that having instituted suit within one year
after the discharge of the goods from the carrying vessel, they had properly filed their action,
notwithstanding no claim had been made within 15 days. Wherefore, as their position turns out
to be legally untenable, the judgment must be, and is hereby reversed, and the defendants are
absolved from all liability.

13. Bachrach v. British American Assurance Co. (1910)

G.R. No. L-5715 December 20, 1910

Lessons Applicable: Effect of Change of Interest in Thing Insured (Insurance)

Laws Applicable:

FACTS:

 E. M. Bachrach insured goods belonging to a general furniture store, such as iron and
brass bedsteads, toilet tables, chairs, ice boxes, bureaus, washstands, mirrors, and sea-
grass furniture stored in the ground floor and first story of house and dwelling with
an authorized agent of the British American Assurance Company

 British American Assurance Company denied alleging that:

o property covered by the policy to H. W. Peabody & Co. to secure certain

indebtedness due and owing to said company

o interest in certain of the goods covered by the said policy is trasnferred to Macke to
secure certain obligations assumed by Macke and on behalf of Bachrach

o willfully placed a gasoline can containing 10 gallons of gasoline close to the insured
goods

o made no proof of the loss with the time required by the condition

 RTC: British American Assurance Company liable to bACHRACH

ISSUE: W/N Bachrach can claim

HELD: YES. lower court affirmed

 keeping of inflammable oils on the premises, though prohibited by the policy, does not
void it if such keeping is incidental to the business

 It may be added that there was no provision in the policy prohibiting the keeping of paints
and varnishes upon the premises where the insured property was stored. If the company
intended to rely upon a condition of that character, it ought to have been plainly
expressed in the policy.

 alienation clause - forfeiture if the interest in the property pass from the insured

 there is no alienation within the meaning of the insurance law until the mortgage acquires
a right to take possession by default under the terms of the mortgage. No such right is
claimed to have accrued in the case at bar, and the alienation clause is therefore
inapplicable.

 we can not find that there is a preponderance of evidence showing that the plaintiff did
actually set fire or cause fire to be set to the goods in question

 It does not positively appear of record that the automobile in question was not included in
the other policies. It does appear that the automobile was saved and was considered as a
part of the salvaged. It is alleged that the salvage amounted to P4,000, including the
automobile. This amount (P4,000) was distributed among the different insurers and the
amount of their responsibility was proportionately reduced. The defendant and appellant
in the present case made no objection at any time in the lower court to that distribution of
the salvage. The claim is now made for the first time.

14. G.R. No. L-66596 August 28, 1984

THE NEW ZEALAND INSURANCE COMPANY, INC., petitioner,

vs.
THE HONORABLE INTERMEDIATE APPELLATE COURT

Facts:

A cargo of oats was consigned to Muller and Phipps (Manila) Ltd. The cargo was insured against
all risks by The New Zealand Insurance Co., Ltd., the petitioner herein. When the cargo was
discharged several cartons which contained the oats were in bad order. The consignee filed a
claim against the insurer for the value of the damaged goods which the latter paid in the amount
of P18,148.69. The insurer as subrogee of the consignee sued E. Razon, Inc., the respondent
herein, who was the arrastre operator. The insurer demanded reimbursement in the amount of
P17,025.87. The lower figure is due to the fact that the carrier responded for its share of the loss
in the sum of P1,121.02. The Court of First Instance of Manila gave judgment in favor of the
plaintiff. It ordered "the defendant to pay to the plaintiff P17,025.87 with 6% interest from April
23, 1973, until same is paid, P1,000.00 as attomey's fees, and the costs."

E. Razon, Inc. appealed the adverse decision to the Court of Appeals. The Intermediate Appellate
Court which succeeded the Court of Appeals reversed the decision of the trial court "On the
ground of prescription, appellee has no cause of action against the appellant."

Issue: W/N the plaintiff has a claim.

Held:

Yes. The trial court has overlooked the significance of the request for, and the result of, the bad
order examination, which were filed and done within fifteen days from the haulage of the goods
from the vessel. Said request and result, in effect, served the purpose of a claim, which is —
 "to afford the carrier or depositary reasonable opportunity and facilities to check the
validity or claims while facts are still fresh in the minds of the person who took part
in the transaction and the documents are still available." (Consunji vs. Manila Port
Service, L-15551, 29 Nov. 1960)

Indeed, the examination undertaken by the defendant's own inspector not only gave the
defendant an opportunity to check the goods but is itself a verification of its own liability (Cf.
Parsons Hardware vs. Manila Railroad Co., L-15173, May 30, 1961).