Case Digest (G.R. No. 94071)
Facts:
In New Life Enterprises and Julian Sy vs. Hon. Court of Appeals, Equitable Insurance Corporation, Reliance Surety & Insurance Co., Inc. and Western Guaranty Corporation (G.R. No. 94071, March 31, 1992), petitioners Julian Sy and Jose Sy Bang formed a partnership under the trade name New Life Enterprises in Lucena City, dealing in construction materials. On May 15, 1981, Western Guaranty Corporation issued Fire Insurance Policy No. 37201 for P350,000.00 (renewed May 13, 1982); on July 30, 1981, Reliance Surety & Insurance Co., Inc. issued Fire Insurance Policy No. 69135 for P300,000.00 (renewed by Certificate No. 41997) and on November 12, 1981, Policy No. 71547 for P700,000.00; and on February 8, 1982, Equitable Insurance Corporation issued Policy No. 39328 for P200,000.00. Thus, the insured stocks in trade amounted to P1,550,000.00. On October 19, 1982, at about 2:00 a.m., fire of electrical origin razed the two-storey building and its contents. Julian Sy promptly filed claimsCase Digest (G.R. No. 94071)
Facts:
- Formation of partnership and insurance procurement
- Julian Sy and Jose Sy Bang formed New Life Enterprises in Lucena City, engaging in the sale of construction materials.
- Stocks in trade were insured with three companies: Western Guaranty Corporation (P350,000), Reliance Surety and Insurance Co., Inc. (P300,000 under Policy No. 69135; P700,000 under No. 71547), and Equitable Insurance Corporation (P200,000).
- Fire loss and claim submission
- On October 19, 1982 at about 2:00 AM, the New Life Enterprises building was gutted by an electrical fire; stocks in trade claimed fully destroyed.
- Julian Sy submitted fire clearance, insurance policies and inventory to each insurer’s agent; insurers treated claims as “sister companies” and sequentially referred him among them.
- Denial of claims and procedural history
- Western Guaranty denied the P350,000 claim by letter dated March 9, 1983 (breach of policy conditions).
- Reliance denied the P1,000,000 claim by letter dated November 23, 1982; Equitable denied the P200,000 claim by letter dated February 22, 1983, both citing policy violations.
- Petitioners’ counsel sought specific grounds of denial; Reliance responded on March 30, 1983 that Policy Condition No. 3 (“Other Insurance Clause”) had been breached.
- Petitioners filed three consolidated civil actions on January 31, 1984 against each insurer in the Regional Trial Court, which on December 19, 1986 rendered judgment in their favor, awarding principal, 12% interest per annum, and attorney’s fees under Sec. 244 of the Insurance Code.
- The Court of Appeals reversed, holding that Conditions Nos. 3 and 27 were violated, forfeiting benefits and barring suit for lateness; petitioners’ appeal by certiorari ensued.
Issues:
- Did petitioners violate Policy Condition No. 3 (“Other Insurance Clause”) by failing to declare co-insurances, thus forfeiting benefits?
- Did petitioners breach Policy Condition No. 15 (forfeiture upon false declaration) by omission or misrepresentation?
- Did petitioners fail to comply with Policy Condition No. 27 (“Action or Suit Clause”) requiring suit within one year after claim denial, thereby abandoning their claims?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)