G.R. No. 224567 - Cu vs. Ventura

During the period from September 1918 to February 1919, the plaintiff, E. Macias & Co., Importers and Exporters, applied for and obtained several fire insurance policies covering its mercantile establishment in Manila.
The policies obtained were as follows:

Two policies with the China Fire Insurance & Co., Ltd.: one dated September 16, 1918, for P12,000 and the other dated March 21, 1919, for P15,000.
One policy with the Yangtsze Fire Association, Ltd., dated February 3, 1919, for P10,000.
One policy with the State Assurance Co., Ltd., dated February 3, 1919, for P15,000.

All policies were secured through Warner, Barnes & Co., Ltd., which acted as the agent for the insurance companies.

On March 25, 1919, while the policies were still in force, a fire broke out in the plaintiff’s place of business causing partial damage and destruction of insured property.
The plaintiff submitted a claim for damages to the agent, Warner, Barnes & Co., Ltd.
Negotiations between the parties failed to produce an agreement on the quantum of loss, leading the agent to reject the claim on April 7, 1919.

On June 14, 1919, the plaintiff filed a legal action against Warner, Barnes & Co., Ltd. in its capacity as agent for the insurance companies, seeking recovery under the insured policies.
The trial court ruled in favor of the plaintiff, but upon appeal in case R.G. No. 16492, this court reversed the decision and dismissed the action on the ground that the real party in interest was the insurance companies themselves.

On September 30, 1922, the plaintiff initiated a new action against the actual insurance companies based on the same facts and cause of action originally alleged.
The defendants (the insurance companies) interposed a general denial and several special defenses:

The plaintiff failed to render a written claim specifying the articles, items of property damaged, and the amount of loss.
The plaintiff submitted a claim that was grossly fraudulent and in violation of the stipulations contained in the policies.
The plaintiff did not institute the suit within the contractual period of three months after its claim had been finally rejected (April 7, 1919).

The trial court sustained the special defense regarding the timeliness of the suit, dismissing the complaint with costs.

The appellant contended that since arbitration was a condition precedent to initiating a suit and no arbitration had been conducted, the three-month limitation should not have commenced.
Additionally, the appellant argued that even if the limitation period began on April 7, 1919, section 49 of the Code of Civil Procedure—allowing for a refiled claim within one year after a dismissal not based on merits—should enable the present action to be timely.

The case extensively reviews controlling authorities, particularly the leading case of Riddlesbarger vs. Hartford Fire Ins. Co., which held that contractual conditions in insurance policies regarding the period within which an action must be commenced are binding and not subject to statutory exceptions.
Numerous cases across various jurisdictions are cited to reinforce the principle that contractual limitations prevail over statutory limitations and any exceptions arising therefrom.

Whether the present action was brought within the time prescribed by the insurance policies.
Whether the plaintiff’s failure to bring suit within the three-month period after claim rejection (April 7, 1919) is fatal to recovery.

Whether the absence of arbitration prior to initiating the suit affects the commencement of the contractual limitation period.
Whether the arbitration clause, though not explicitly discussed in the pleadings or stipulations, should impact the running of the limitations period.

Whether the provision in section 49, which allows a new action within one year after a dismissed action not decided on the merits, can be invoked to bypass the contractual time limitation in the insurance policies.
Whether the rights conferred by the contract (the insurance policy) override the statutory exceptions provided in section 49.