Case Digest (G.R. No. 94071)
Facts:
New Life Enterprises and Julian Sy v. Hon. Court of Appeals, Equitable Insurance Corporation, Reliance Surety and Insurance Co., Inc. and Western Guaranty Corporation, G.R. No. 94071, March 31, 1992, Supreme Court Second Division, Regalado, J., writing for the Court.Petitioners New Life Enterprises (a partnership of Julian Sy and Jose Sy Bang) and Julian Sy carried on a business in Lucena City and insured their stocks-in-trade with three insurers: Western Guaranty Corporation (Fire Policy No. 37201 for P350,000, renewed May 13, 1982), Reliance Surety and Insurance Co., Inc. (Policy No. 69135 for P300,000 and Policy No. 71547 for P700,000), and Equitable Insurance Corporation (Policy No. 39328 for P200,000). On October 19, 1982 a fire gutted the building and stocks; the Philippine Constabulary/INP certified the cause as electrical.
After submitting claim papers, petitioners received denial letters from the three insurers (Reliance’s denial dated November 23, 1982; Equitable’s February 22, 1983; Western’s March 9, 1983), each stating that policy conditions had been breached. Petitioners alleged agents knew of the multiple coverages and that the insurers were “sister companies”; insurers asserted policy conditions were violated because the policies did not state or endorse the other co-insurances.
Because of the denials, petitioners filed separate civil suits in the Regional Trial Court, Branch LVII, Lucena City (Civil Cases Nos. 6-84, 7-84 and 8-84), which were consolidated. The trial court, by decision dated December 19, 1986, rendered judgment for petitioners against Equitable (P200,000 + attorney’s fees), Reliance (P1,000,000 + attorney’s fees) and Western (P350,000 payable to a bank as stipulated on the policy + attorney’s fees) and awarded interest pursuant to Section 244 of the Insurance Code, finding the denials unreasonable.
Respondent Court of Appeals (CA-G.R. CV No. 13866) reversed the trial court, concluding that petitioners had breached policy conditions (notably Condition No. 3, the “Other Insurance Clause,” and Condition No. 15 on false declarations) and that petitioners’ claims against Reliance were time-barred under Condition No. 27 (action-or-suit clause). Petitioners sought relief from this reversal by an appeal/certior...(Pro-only)
Issues:
- Was petitioners’ suit against Reliance barred by the one-year action-or-suit clause in Policy Condition No. 27?
- Did petitioners’ failure to disclose other existing insurance constitute a breach of Policy Condition No. 3 (the Other Insurance Clause) (and related false declaration under Condition No. 15) that forfeited their right to recover?
- Can the insurers be estopped from denying the claim because their agents allegedly knew of the co-insurance, or beca...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
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Doctrine:
- (Pro-only)