Case Summary (G.R. No. L-59919)
Relevant Facts and Insurance Policy Details
Aurelio Lacson insured his Toyota Land Cruiser for a one-year period from December 3, 1974, to December 3, 1975, under policy No. BIFC/PV-0767 obliging comprehensive coverage. On December 1, 1975, Lacson delivered the vehicle for repairs at the shop of Carlos Jamelo in Bacolod City. On December 2, 1975, the vehicle was taken without permission by employees of the repair shop—Rogelio Mahinay, Johnny Mahinay, Rogelio Macapagong, and Rogelio Francisco. The unlawfully driven vehicle met with an accident, inflicting damage estimated at ₱21,849.62.
Criminal and Civil Proceedings
The shop owner filed a criminal case for Qualified Theft against the employees who took the vehicle. One of the accused, Rogelio Mahinay, pleaded guilty and was convicted of Theft. Despite this, Malayan Insurance refused to indemnify Lacson, citing that the driver at the time was not duly licensed, and hence the claim was allegedly not covered. This refusal prompted Lacson to file a civil suit against Malayan Insurance seeking payment of the policy limit of ₱20,000 (less deductible) plus legal interest, attorney’s fees, and costs.
Issues on Appeal
Malayan Insurance raised four main arguments on appeal:
- That a final conviction of theft is necessary before insurance coverage for theft can be claimed, fearing the ruling would prejudice the insurance industry.
- That the award for actual damages to the vehicle lacked sufficient evidentiary basis.
- That the real party in interest was the Bacolod Industrial Finance Corporation (BIFC), not Lacson, and thus Lacson had no cause of action.
- That interest should be computed from the final judgment date, not from the filing of the complaint, consistent with established Supreme Court doctrine.
Theft Coverage and Liability of Insurer
The Supreme Court held that the unlawful taking of the vehicle by persons without permission or authority fell within the "theft" coverage of the insurance policy. The decision emphasized that it is not necessary to await a final criminal conviction to make a claim under a theft insurance policy. The guilty plea and conviction of Rogelio Mahinay for Theft substantiated the unlawful taking sufficient to uphold the indemnification claim. Thus, the insurer’s denial based on the driver’s lack of a license was not a valid ground to deny coverage.
Damages and Evidentiary Basis
The Court affirmed the trial court’s award of ₱20,000, the policy limit for coverage minus the deductible of ₱800. The damages were based on an expert estimate from Fidelity Motor Company placing the damage at ₱21,849.62. The Court explained that actual repair of the vehicle is unnecessary to claim indemnity as the insured has the option to use the proceeds for repair or otherwise. The insurer's liability was thus properly fixed within the policy limits and supported by competent evidence.
Real Party in Interest and Party-Status Issue
Concerning the complaint that Lacson was not the real party in interest, the Court found no merit in the argument. The policy memorandum indicated that loss or damage proceeds would be payable to BIFC "as their interest may appear." BIFC’s interest was limited to ₱2,000 compared to Lacson’s ₱26,000 interest in the vehicle. The Court noted that BIFC did not express any objec
...continue readingCase Syllabus (G.R. No. L-59919)
Facts of the Case
- Aurelio Lacson, the private respondent and owner of a 1972 Toyota NP Land Cruiser (Plate No. NY-362, Engine No. F-374325), insured the vehicle under a "private car comprehensive" insurance policy (No. BIFC/PV-0767) with Malayan Insurance Co., Inc. (petitioner) for one year, from December 3, 1974, to December 3, 1975.
- On December 1, 1975, Lacson delivered the vehicle to the repair shop of Carlos Jamelo.
- On December 2, 1975, while the vehicle was at the repair shop, employees Rogelio Mahinay, Johnny Mahinay, Rogelio Macapagong, and Rogelio Francisco took the vehicle without permission and drove it, resulting in a vehicular accident in Bo. Taculing, Bacolod City.
- The accident caused damages estimated at P21,849.62.
- Carlos Jamelo reported the incident to the authorities and filed a qualified theft criminal case against the employees who took the vehicle.
- Lacson sought indemnification under the insurance policy, but Malayan Insurance denied the claim on the ground that the driver was unlicensed, and thus, the claim was not covered.
- Lacson filed a civil suit against Malayan Insurance Company for damages in the Court of First Instance (CFI) of Negros Occidental.
Procedural History
- The CFI rendered a decision holding the petitioner liable to pay Lacson P20,000 (the maximum coverage under the policy less the deductible franchise), legal interest from the date of filing of the complaint, attorney’s fees of P5,000, litigation expenses, and costs.
- The petitioner appealed to the Court of Appeals (CA), which affirmed the CFI decision and denied the petitioner’s motion for reconsideration.
- The petitioner then filed an appeal by certiorari with the Supreme Court.
Issues on Appeal
- Whether the Court of Appeals erred in holding that a conviction for theft is unnecessary for the insurance claim to be compensable under the theft coverage of the insurance policy.
- Whether there was sufficient and competent evidence to support the award for actual damages for the vehicle.
- Whether the petitioner was improperly held liable despi