INSURABLE INTEREST.docx

8/9/2019 INSURABLE INTEREST.docx

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Case Digest Insurance (GEAGONIA & PALILEO CASES ARE FOR SECTION 8)

1. Geagonia v CA G.R. No. 114427 February 6, 1995

Facts:

Geagonia o!ner o" a store o#taine$ "ro% Countr 'aners "ire insurance o*ic "or P+,,,,,-,,- T.e + ear o*ic an$ co/ere$

t.estoc tra$ing o" $r goo$s- T.e o*ic note$ t.e re0uire%ent t.at 12- T.e insure$ s.a** gi/e notice to t.e Co%an o"

an insurance or insurances a*rea$ e""ecte$ or !.ic. %a su#se0uent* #e e""ecte$ co/ering an o" t.e roert or roerties

consisting o" stocs in tra$e goo$s in rocess an$3or in/entories on* .ere# insure$ an$ un*ess notice #e gi/en an$ t.e articu*ars

o" suc. insurance or insurances #e state$ t.erein or en$orse$ in t.is o*ic ursuant to Section 4, o" t.e Insurance Co$e # or on

#e.a*" o" t.e Co%an #e"ore t.e occurrence o" an *oss or $a%age a** #ene"its un$er t.is o*ic s.a** #e $ee%e$ "or"eite$ ro/i$e$

.o!e/er t.at t.is con$ition s.a** not a* !.en t.e tota* insurance orinsurances in "orce at t.e ti%e o" t.e *oss or $a%age is not%ore t.an P5,,,,,-,,-1

T.e etitioners6 stocs !ere $estroe$ # "ire- 7e t.en "i*e$ a c*ai% !.ic. !as su#se0uent* $enie$ #ecause t.e etitioner6s stocs

!ere co/ere$ # t!o ot.er "ire insurance o*icies "or P. 5,,,,, issue$ # PFIC- T.e #asis o" t.e ri/ate reson$ents $enia* !as

t.e etitioners a**ege$ /io*ation o" Con$ition 2 o" t.e o*ic-

Geagonia t.en "i*e$ a co%*aint against t.e ri/ate reson$ent in t.e Insurance Co%%ission "or t.e reco/er o" P+,,,,,-,,

un$er "ire insurance o*ic an$ $a%ages- 7e c*ai%e$ t.at .e ne! t.e e9istence o" t.e ot.er t!o o*icies- 'ut .e sai$ t.at .e .a$

no no!*e$ge o" t.e ro/ision in t.e ri/ate reson$ents o*ic re0uiring .i% to in"or% it o" t.e rior o*icies an$ t.is re0uire%ent

!as not %entione$ to .i% # t.e ri/ate reson$ents agent-

T.e Insurance Co%%ission "oun$ t.at t.e etitioner $i$ not /io*ate Con$ition 2 as .e .a$ no no!*e$ge o" t.e e9istence o" t.e

t!o "ire insurance o*icies o#taine$ "ro% t.e PFIC t.at it !as Ce#u Tesing Te9ti*es !3c rocure$ t.e PFIC o*icies !3o in"or%ing .i%

or securing .is consent an$ t.at Ce#u Tesing Te9ti*e as .is cre$itor .a$ insura#*e interest on t.e stocs-

T.e Insurance Co%%ission t.en or$ere$ t.e reson$ent co%an to a co%*ainant t.e su% o" P+,,,,,-,, !it. interest an$

attorne6s "ees-

CA re/erse$ t.e $ecision o" t.e Insurance Co%%ission #ecause it "oun$ t.at t.e etitioner ne! o" t.e e9istence o" t.e t!o ot.er

o*icies issue$ # t.e PFIC-

Issues:

+- ;ON t.e etitioner .a$ not $isc*ose$ t.e t!o insurance o*icies !.en .e o#taine$ t.e "ire insurance an$ t.ere# /io*ate$

Con$ition 2 o" t.e o*ic-

5- ;ON .e is ro.i#ite$ "ro% reco/ering

He!: 44

FAC$%: P*ainti"" o#taine$ "ro% $e"en$ant a *oan in t.e su% o" P+5,,,- To secure t.e a%ent o" t.e a"oresai$ *oan $e"en$ant

re0uire$ *ainti"" to sign a $ocu%ent no!n as Con$itiona* Sa*e o" Resi$entia* 'ui*$ing urorting to con/e to $e"en$ant !it.

rig.t to reurc.ase a t!ostor #ui*$ing o" strong %ateria*s #e*onging to *ainti""- T.is $ocu%ent $i$ not e9ress t.e true intention

o" t.e arties !.ic. !as %ere* to *ace sai$ roert as securit "or t.e a%ent o" t.e *oan-


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A"ter t.e e9ecution o" t.e a"oresai$ $ocu%ent $e"en$ant insure$ t.e #ui*$ing against "ire "or t.e su% o" P+4,,, t.e insurance

o*ic .a/ing #een issue$ in t.e na%e o" $e"en$ant- T.e #ui*$ing !as art* $estroe$ # "ire an$ a"ter roer $e%an$ $e"en$ant

co**ecte$ "ro% t.e insurance co%an an in$e%nit o" P+2+,B-,,- P*ainti"" $e%an$e$ "ro% $e"en$ant t.at s.e #e cre$ite$ !it. t.e

necessar a%ount to a .er o#*igation out o" t.e insurance rocee$s #ut $e"en$ant re"use$ to $o so-

I%%&': ;ON a %ortgagor is entit*e$ to t.e insurance rocee$s o" t.e %ortgage$ roert in$een$ent* insure$ # t.e %ortgagee

;.at is t.e e""ect o" t.e insurance

H'(): NO- T.e ru*e is t.at !.ere a %ortgagee in$een$ent* o" t.e %ortgagor insures t.e %ortgage$ roert in .is o!n na%e

an$ "or .is o!n interest .e is entit*e$ to t.e insurance rocee$s in case o" *oss #ut in suc. case .e is not a**o!e$ to retain .is c*ai%

against t.e %ortgagor #ut is asse$ # su#rogation to t.e insurer to t.e e9tent o" t.e %one ai$- (ance on Insurance 5$ e$-

4H) Or state$ in anot.er !a t.e %ortgagee %a insure .is interest in t.e roert in$een$ent* o" t.e %ortgagor- In t.at

e/ent uon t.e $estruction o" t.e roert t.e insurance %one ai$ to t.e %ortgagee !i** not inure to t.e #ene"it o" t.e

%ortgagor an$ t.e a%ount $ue un$er t.e %ortgage $e#t re%ains unc.ange$- T.e %ortgagee .o!e/er is not a**o!e$ to retain .is

c*ai% against t.e %ortgagor #ut it asses # su#rogation to t.e insurer to t.e e9tent o" t.e insurance %one ai$-

START OF INSRA'LE INTEREST CASES

*. IN%&(AR (IF' +%. 'RA)-

/ %CRA 11

Facts:

J 'uena/entura E#ra$o !as issue$ a* *i"e *an # Insu*ar Co%an- 7e $esignate$ Cariona as .is #ene"iciar re"erring to .er as

.is !i"e-

J T.e insure$ t.en $ie$ an$ Caronia trie$ to c*ai% t.e rocee$s o" t.e sai$ *an-

J S.e a$%itte$ to #eing on* t.e co%%on *a! !i"e o" t.e insure$-

J Pascua*a t.e *ega* !i"e a*so "i*e$ a c*ai% asserting .er rig.t as t.e *ega* !i"e- T.e co%an t.en "i*e$ an action "or inter*ea$er-

Issue:

;.et.er or not t.e co%%on *a! !i"e na%e$ as #ene"iciar can co**ect t.e rocee$s-

7e*$:

NO-

T.e ci/i* co$e ro.i#itions on $onations %a$e #et!een ersons gui*t o" a$u*terous concu#inage a*ies to insurance contracts- On

%atters not seci"ica** ro/i$e$ "or # t.e Insurance La! t.e genera* ru*es on Ci/i* *a! s.a** a*- A *i"e insurance o*ic is no

$i""erent "ro% a ci/i* $onation as "ar as t.e #ene"iciar is concerne$ since #ot. are "oun$e$ on *i#era*it-


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;7< ;AS T7E COKKON LA; ;IFE NOT ED TO COLLECT T7E PROCEEDS DESPITE T7E FACT T7AT S7E ;AS T7E 'ENEFICIAR an$ 5,+5

o" CC ro.i#it ersons !.o are gui*t o" a$u*ter or concu#inage "ro% #eing #ene"iciaries o" t.e *i"e insurance o*icies o" t.e ersons

!it. !.o% t.e co%%itte$ a$u*ter or concu#inage- I" t.e SC use$ on* Sec- 42 it !ou*$ .a/e gone against Art- B2> an$ 5,+5-

4. %ou"0ern (uon '3oyees Ass. +. Go3eo, '" A. 1954

FACTS:

Southern Luzon Employees' Association (SLEA) is composed of laborers and

employees of Tayabas Bus. Company and Batanas transportation Company

!"urpose# mutual aid of its members and their dependents in case of death.

$%&%# SLEA adopted a resolution alloin a member to name as his beneciaries

his common la ife andor children ith her.

*oman Concepcion as a member of SLEA. +e listed as his beneciaries#

!A,-L/A 0AL1LES (common la ife)

!*10A/2 3*.2 ESTELA2 *1LA/412 *1B/ (children ith A5uilina)

$%67 *oman died.

SLEA collected contributions from its members amountin to "82676 for its

member2 *oman.

!those ho presented to claim$.) 3uanita 9olpeo (leal ife)and children:8.) A5uilina (common la ife) and children ( listed beneciaries):;.) Elsie +icban (another common la ife) and child

an action for interpleadin as instituted by SLEA aainst the claimants.

the court rendered the decision declarin A5uilina and her children the sole

beneciaries of the sum "82676.

only 91L"E1 and C+L4*E/ appealed claimin that#

a.) insurance la is not applicable since SLEA is a mutual benet association

under *e


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the membershipD2 thus2 the loer court correctly held that the areement b SLEA

and *oman partoo of the nature of a contract of insurance.

8.) @es. The loer court in +>+,: Sun Li"e Assurance Co- o" Cana$a issue$ a 5,ear en$o!%ent insurance o*ic ont.e *i"e o" 7i*ario

Gercio

insurance co%an agree$ to insure t.e *i"e o" Gercio "or t.e su% o" P5,,, to #e ai$ .i% on Fe#ruar + +>2,

or i" t.e insure$ s.ou*$ $ie #e"ore sai$ $ate t.en to .is !i"e Krs- An$rea ia*cita s.ou*$ s.e sur/i/e .i% ot.er!ise to t.e

e9ecutors a$%inistrators or assigns o" t.e insure$

o*ic $i$ not inc*u$e an ro/ision reser/ing to t.e insure$ t.e rig.t to c.ange t.e #ene"iciar

En$ o" +>+>: s.e !as con/icte$ o" t.e cri%e o" a$u*ter

Sete%#er H +>5,: a $ecree o" $i/orce !as issue$

Karc. H +>55: Gercio "or%a** noti"ie$ t.e Sun Li"e t.at .e .a$ re/oe$ .is $onation in "a/or o" An$rea ia*cita an$ t.at

.e .a$ $esignate$ in .er stea$ .is resent !i"e A$e*a Garcia $e Gercio as t.e #ene"iciar o" t.e o*ic

Sun Li"e re"use$

Gercio "i*e$ a etition "or %an$a%us to co%e* Sun Li"e

Tria* Court: "a/ore$ Gercio

SS-E# >/ 9ercio has the riht to chane the beneciary of the policy

7ELD: NO- Dis%isse$-

T.e !i"e .as an insura#*e interest in t.e *i"e o" .er .us#an$-
http://www.philippinelegalguide.com/2011/09/jurisprudence-gr-no-23703_708.htmlhttp://www.philippinelegalguide.com/2011/09/jurisprudence-gr-no-23703_708.htmlhttp://www.philippinelegalguide.com/2011/09/jurisprudence-gr-no-23703_708.html


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T.e #ene"iciar .as an a#so*ute /este$ interest in t.e o*ic "ro% t.e $ate o" its issuance an$ $e*i/er- So !.en a o*ic o"

*i"e insurance is taen out # t.e .us#an$ in !.ic. t.e !i"e is na%e$ as #ene"iciar s.e .as a su#sisting interest in t.e o*ic

a*ies to a o*ic to !.ic. t.ere are attac.e$ t.e inci$ents o" a *oan /a*ue cas. surren$er /a*ue an auto%atic

e9tension # re%iu%s ai$ an$ to an en$o!%ent o*ic as !e** as to an or$inar *i"einsurance o*ic-

I" t.e .us#an$ !is.es to retain to .i%se*" t.e contro* an$ o!ners.i o" t.e o*ic .e %a so ro/i$e in t.e o*ic-

'ut i" t.e o*ic contains no ro/ision aut.ori@ing a c.ange o" #ene"iciar !it.out t.e #ene"iciars consent t.e

insure$ cannot %ae suc. c.ange-

Accor$ing* it is .e*$ t.at a *i"e insurance o*ic o" a .us#an$ %a$e aa#*e to t.e !i"e as #ene"iciar is t.e searate

roert o" t.e #ene"iciar an$ #eon$ t.e contro* o" t.e .us#an$-

e""ect ro$uce$ # t.e $i/orce t.e P.i*iine Di/orce La! Act No- 5B+, %ere* ro/i$es in section > t.at t.e $ecree o

$i/orce s.a** $isso*/e t.e co%%unit roert as soon as suc. $ecree #eco%es "ina*

a#sence o" a statute to t.e contrar t.at i" a o*ic is taen out uon a .us#an$s *i"e t.e !i"e is na%e$ as

#ene"iciar t.erein a su#se0uent $i/orce $oes not $estro .er rig.ts un$er t.e o*ic

Neit.er t.e .us#an$ nor t.e !i"e nor #ot. toget.er .a$ o!er to $estro t.e /este$ interest o" t.e c.i*$ren in t.e o*ic-

+)A. )' C-N%&'GRA +. G%I% R'$IR''N$ IN%&RANC' 'N'FI$%

Facts:

J =ose Consuegra !as e%*oe$ as a s.o "ore%an o" t.e O""ice o" t.e District Engineer in Surigao De* Norte-

J ;.en .e !as sti** a*i/e .e contracte$ t!o %arriages:

o First M Rosario Dia@ 5 c.i*$ren =ose Consuegra =r- an$ Pe$ro #ut #ot. re$ecease$ .i%

o 5n$M 'asi*ia 'er$in B c.i*$ren- (this was contracted in GF while the first marriage subsisted)

J 'eing a GSIS %e%#er !.en .e $ie$ t.e rocee$s o" .is *i"e insurance !ere ai$ # t.e GSIS to 'er$in an$ .er c.i*$ren !.o

!ere t.e #ene"iciaries na%e$ in t.e o*ic-

J Since .e !as in t.e go/6t ser/ice "or 55-4,58 ears .e !as entit*e$ to retire%ent insurance #ene"its "or !.ic. no #ene"iciar !as

$esignate$-

J 'ot. "a%i*ies "i*e$ t.eir c*ai%s !it. t.e GSIS !.ic. ru*e$ t.at t.e *ega* .eirs !ere Dia@ !.o is entit*e$ to one.a*" or 83+ o" t.e

retire%ent #ene"its an$ 'er$in an$ .er c.i*$ren !ere entit*e$ to t.e re%aining .a*" eac. to recei/e an e0ua* s.are o" +3+-

J 'er$in !ent to CFI on aea*- CFI a""ir%e$ GSIS $ecision-

Issue:

$o !.o% s.ou*$ t.e retire%ent insurance #ene"its #e ai$

7e*$:

'ot. "a%i*ies are entit*e$ to .a*" o" t.e retire%ent #ene"its-

T.e #ene"iciar na%e$ in t.e *i"e insurance $oes NOT auto%atica** #eco%e t.e #ene"iciar in t.e retire%ent insurance- ;.en

Consuegra $uring t.e ear* art o" +>H2 or #e"ore +>H2 $esignate$ .is #ene"iciaries in .is *i"e insurance .e cou*$ NOT .a/e

inten$e$ t.ose #ene"iciaries o" .is *i"e insurance as a*so t.e #ene"iciaries o" .is retire%ent insurance #ecause t.e ro/isions on

retire%ent insurance un$er t.e GSIS ca%e a#out on* !.en CA +8 !as a%en$e$ # RA , on =une +8 +>4+-


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n$er t.e *a!s (CC an$ ru*es o" Court) T.e "at.er is constitute$ as t.e %inor6s *ega* a$%inistrator o" t.e rot an$ !.en t.e

rot o" t.e c.i*$ is !ort. %ore t.an P5T (as in t.e case at #ar t.e %inor6s rot !as !ort. 54,, .is s.are as #ene"iciar) t.e

"at.er a %ust "i*e a etition "or guar$ians.i an$ ost a guar$ians.i #on$- In t.e case at #ar t.e "at.er $i$ not "i*e an etition "o

guar$ians.i nor ost a guar$ians.i #on$ an$ as suc. cannot ossi#* e9ercise t.e o!ers /este$ on .i% as *ega* a$%inistrator o

t.e %inor6s roert- T.e consent gi/en "or an$ in #e.a*" o" t.e son !it.out rior court aut.ori@ation to t.e *oan a*ication an$ t.e

surren$er !as insufficient and ineffectivean$ P7ILAKLIFE !as ?usti"ie$ in $isaro/ing t.e sai$ a*ications-

Assu%ing t.at t.e rot o" t.e !ar$ !as *ess t.an 5T t.e e""ect !ou*$ #e t.e sa%e since t.e arents !ou*$ on* #e e9e%te$

"ro% "i*ing a #on$ an$ ?u$icia* aut.ori@ation #ut t.eir acts as *ega* a$%inistrators are on* *i%ite$ to acts o" %anage%ent or

a$%inistration an$ not to acts o" encu%#rance or $isosition-

#HI(A(IF' +. #IN')A (IF' IN%&RANC'

Facts:

J On =an- +4 +>2 Di%auga rocesse$ an or$inar *i"e insurance o*ic "ro% P.i*a%*i"e an$ $esignate$ .is !i"e an$ c.i*$ren as

irre/oca#*e #ene"iciaries-

J On Fe#- 55 +>8, Di%auga "i*e$ a etition in court to a%en$ t.e $esignation o" t.e #ene"iciaries in .is o*ic "ro% irre/oca#*e to

re/oca#*e-

J Lo!er Court grante$ t.e etition-

Issue:

;.et.er or not t.e court erre$ in granting Di%auga6s etition-

7e*$:


8/18

J One o" t.e stiu*ations o" t.e one (+) ear *ease contract states: "18. . . . The !!! shall not insure against fire the chattels#

merchandise# te$tiles# goods and effects %laced at an& stall or store or s%ace in the leased %remises without first obtaining the

written consent and a%%roval of the !'. If the !!! obtain(s) the insurance thereof without the consent of the !' then

the %olic& is deemed assigned and transferred to the !' for its own benefit . . ."

J Not!it.stan$ing t.e a#o/e stiu*ation t.e C.a souses insure$ against *oss # "ire t.eir %erc.an$ise insi$e t.e *ease$ re%ises

"or Fi/e 7un$re$ T.ousan$ (P4,,,,,-,,) !it. t.e nite$ Insurance !it.out t.e !ritten consent CS-

J On t.e $a t.at t.e *ease contract !as to e9ire "ire #roe out insi$e t.e *ease$ re%ises- ;.en CS *earne$ o" t.e insurance

ear*ier rocure$ # t.e C.a souses (!it.out its consent) it !rote t.e nite$ a $e%an$ *etter asing t.at t.e rocee$s o" t.e

insurance contract (#et!een t.e C.a souses an$ nite$) #e ai$ $irect* to CS #ase$ on its *ease contract !it. t.e C.a souses-

J nite$ re"use$ to a CS a**eging t.at t.e *atter .a$ no insura#*e interest- 7ence t.e *atter "i*e$ a co%*aint against t.e C.a

souses an$ nite$-

Issue:

;.et.er or not CS can c*ai% t.e rocee$s o" t.e "ire insurance-

7e*$:

NO- CS .as no insura#*e interest-

Sec- +8 o" t.e Insurance Co$e ro/i$es:

"ec. 18. *o contract or %olic& of insurance on %ro%ert& shall be enforceable e$ce%t for the benefit of some %erson having an

insurable interest in the %ro%ert& insured."

A non*i"e insurance o*ic suc. as t.e "ire insurance o*ic taen # etitionersouses o/er t.eir %erc.an$ise is ri%ari* a contract

o" in$e%nit- Insura#*e interest in t.e roert insure$ %ust e9ist at t.e ti%e t.e insurance taes e""ect an$ at t.e ti%e t.e *oss

occurs- T.e #asis o" suc. re0uire%ent o" insura#*e interest in roert insure$ is #ase$ on soun$ u#*ic o*ic: to re/ent a erson"ro% taing out an insurance o*ic on roert uon !.ic. .e .as no insura#*e interest an$ co**ecting t.e rocee$s o" sai$ o*ic in

case o" *oss o" t.e roert-

In t.e resent case it cannot #e $enie$ t.at CS .as no insura#*e interest in t.e goo$s an$ %erc.an$ise insi$e t.e *ease$ re%ises

un$er t.e ro/isions o" Section +B o" t.e Insurance Co$e !.ic. ro/i$e:

"ection 1+. The measure of an insurable interest in %ro%ert& is the e$tent to which the insured might be damnified b& loss of

in,ur& thereof."

T.ere"ore CS cannot un$er t.e Insurance Co$e Q a secia* *a! Q #e /a*i$* a #ene"iciar o" t.e "ire insurance o*ic taen # t.e

etitionersouses o/er t.eir %erc.an$ise- T.is insura#*e interest o/er sai$ %erc.an$ise re%ains !it. t.e insure$ t.e C.a souses

T.e auto%atic assign%ent o" t.e o*ic to CS un$er t.e ro/ision o" t.e *ease contract re/ious* 0uote$ is /oi$ "or #eing contrar

to *a! an$3or u#*ic o*ic- T.e rocee$s o" t.e "ire insurance o*ic t.us rig.t"u** #e*ong to t.e souses Ni*o C.a an$ Ste**a C.a

(.erein coetitioners)- T.e insurer (nite$) cannot #e co%e**e$ to a t.e rocee$s o" t.e "ire insurance o*ic to a erson (CS)

!.o .as no insura#*e interest in t.e roert insure$-

-NG (I %ING,


9/18

On Karc. > +>>4 FE' Leasing an$ Finance Cororation entere$ into a *ease o" e0ui%ent an$ %otor /e.ic*es !it. =L Foo$

Pro$ucts- On t.e sa%e $ate icente Ong Li% Sing =r- e9ecute$ an In$i/i$ua* Guarant Agree%ent !it. FE' to guarantee t.e

ro%t an$ "ait."u* er"or%ance o" t.e ter%s an$ con$itions o" t.e a"oresai$ *ease agree%ent- Correson$ing Lease Sc.e$u*es !it.

De*i/er an$ Accetance Certi"icates o/er t.e e0ui%ent an$ %otor /e.ic*es "or%e$ art o" t.e agree%ent- n$er t.e contract =L

!as o#*ige$ to a FE' an aggregate gross %ont.* renta* o" One 7un$re$ Se/ent T.ousan$ Four 7un$re$ NinetFour Pesos

(P+B,H>H-,,)-

=L $e"au*te$ in t.e a%ent o" t.e %ont.* renta*s- As o" =u* 2+ 5,,, t.e a%ount in arrears inc*u$ing t.e ena*t c.arges an$

insurance re%iu%s a%ounte$ to T.ree Ki**ion Four 7un$re$ Fourteen T.ousan$ Four 7un$re$ Si9tEig.t an$ B43+,, Pesos

(P2H+HH8-B4)- On August 52 5,,, FE' sent a *etter to =L $e%an$ing a%ent o" t.e sai$ a%ount- 7o!e/er =L "ai*e$ to a-

On Dece%#er 5,,, FE' "i*e$ a Co%*aint !it. t.e Regiona* Tria* Court o" Kani*a "or su% o" %one $a%ages an$ re*e/in against

=L Li% an$ =o.n Doe-

In an A%en$e$ Ans!er =L an$ Li% a$%itte$ t.e e9istence o" t.e *ease agree%ent #ut asserte$ t.at it is in rea*it a sa*e o"

e0ui%ent on insta*%ent #asis !it. FE' acting as t.e "inancier- On No/e%#er 55 5,,5 t.e tria* court ru*e$ in "a/or o" =L an$ Li%

an$ stresse$ t.e contra$ictor ter%s "oun$ in t.e *ease agree%ent- T.e tria* court state$ a%ong ot.ers t.at i" =L an$ Li% (t.en

$e"en$ants) !ere to #e regar$e$ as on* a *essee *ogica** t.e *essor !.o asserts o!ners.i !i** #e t.e one $irect* #ene"ite$ or

in?ure$ an$ t.ere"ore t.e *essee is not suose$ to #e t.e assure$ as .e .as no insura#*e interest-

On Dece%#er 5B 5,,5 FE' "i*e$ its Notice o" Aea*- Accor$ing* on =anuar +B 5,,2 t.e court issue$ an Or$er e*e/ating t.e

entire recor$s o" t.e case to t.e Court o" Aea*s- On Karc. +4 5,,4 t.e Court o" Aea*s issue$ its Decision $ec*aring t.e

transaction #et!een t.e arties as a "inancia* *ease agree%ent- T.e sai$ $ecision re/erse$ an$ set asi$e t.e tria* court6s $ecision

$ate$ No/e%#er 55 5,,5- 7ence Li% "i*e$ t.e resent Petition "or Re/ie! on Certiorari-

I%%&':

;.et.er or not etitioner .as an insura#*e interest in t.e e0ui%ent an$ %otor /e.ic*es *ease$-

R&(ING:


10/18

7e*$:

Insurane Co3any4/ #HI( 674

Facts:

On =an- +5 +>+8 Dunn %ortgage$ a arce* o" *an$ to SK' to secure a $e#t o" +,T-

Kortgage contract state$ t.at Dunn !as to .a/e t.e roert insure$ at .is o!n e9ense aut.ori@ingSK' to c.oose t.e insurers

an$ to recei/e t.e rocee$s t.ereo" an$ retain so %uc. o" t.e rocee$s as!ou*$ co/er t.e %ortgage $e#t-

Dunn *ie!ise aut.ori@e$ SK' to tae out t.e insurance o*ic "or .i%-

'rias SK'6s genera* %anager aroac.e$ La! nion "or insurance to t.e e9tent o" +4T uon t.eroert- In t.e a*ication 'rias

state$ t.at SK'6s interest in t.e roert !as %ere* t.at o" a%ortgagee-

La! nion not !anting to issue a o*ic "or t.e entire a%ount issue$ one "or PB4,, an$ rocure$anot.er o*ic o" e0ua* a%ount

"ro % Fi*iinas Cia $e Seguros- 'ot. o*icies !ere issue$ in t.e na%e o" SK' on* an$ containe$ no re"erence to an ot.e

interests in t.e rot- 'ot. o*icies re0uire$assign%ents to #e aro/e$ an$ note$ on t.e o*ic-

Pre%iu%s !ere ai$ # SK' an$ c.arge$ to Dunn- A ear *ater t.e o*icies !ere rene!e$-

In +>+B Dunn so*$ t.e roert to 7ar$ing #ut no assign%ent o" t.e o*icies !as %a$e to t.e *atter-

Proert !as $estroe$ # "ire- SK' "i*e$ an action in court to reco/er on t.e o*icies- 7ar$ing !as%a$e a $e"en$ant #ecause #

/irtue o" t.e sa*e .e #eca%e t.e o!ner o" t.e roert a*t.oug. t.eo*icies !ere issue$ in SK'6s na%e-

SK' soug.t to reco/er t.e rocee$s to t.e e9tent o" its %ortgage cre$it !it. t.e #a*ance to go to7ar$ing-

Insurance Co%anies conten$e$ t.at t.e !ere not *ia#*e to 7ar$ing #ecause t.eir *ia#i*it un$er t.eo*icies !as *i%ite$ to t.einsura#*e interests o" SK' on*-

SK' e/entua** reac.e$ a sett*e%ent !it. t.e insurance co%anies an$ !as ai$ t.e #a*ance o" it6s%ortgage cre$it- 7ar$ing !as

*e"t to "en$ "or .i%se*"- Tria* court ru*e$ against 7ar$ing- 7ence t.eaea*-

Issue:

;ON t.e insurance co%anies are *ia#*e to 7ar$ing "or t.e #a*ance o" t.e rocee$s o" t.e 5 o*icies-

He!: NOPE-

n$er t.e Insurance Act t.e %easure o" insura#*e interest in t.e roert is t.e e9tent to !.ic. t.e insure$ %ig.t #e $a%ini"ie$ #

t.e *oss or in?ur t.ereo"- A*so it is ro/i$e$ in t.e IA t.at t.e insurance s.a**#e a*ie$ e9c*usi/e* to t.e roer interest o" t.e

erson in !.ose na%e it is %a$e- n$ou#te$* SK' as t.e %ortgagee o" t.e roert .a$ an insura#*e interest t.erein #ut it cou*$NOT an an e/ent reco/er uon t.e t!o o*icies an a%ount in e9cess o" its %ortgage cre$it -' /irtue o" t.e Insurance Act neit.er

Dunn nor 7ar$ing cou*$ .a/e reco/ere$ "ro% t.e t!o o*icies- ;it. resect to 7ar$ing !.en .e ac0uire$ t.e roert no c.ange or

assign%ent o" t.e o*icies .a$ #een un$ertaen- T.e o*icies %ig.t .a/e #een !or$e$ $i""erent* so as to rotect t.e o!ner #ut t.is

!as not $one- I" t.e !or$ing .a$ #een:

Paa#*e to SK' %ortgagee as its interests %a aear re%ain$er to !.o%soe/er $uring t.e continuance o" t.e ris %a #eco%e

o!ner o" t.e interest insure$

it !ou*$ .a/ero/e$ an intention to insure t.e entire interest in t.e roert NOT %ere* SK'6s an$ !ou*$ .a/e s.o!n to!.o% t.e

%one in case o" *oss s.ou*$ #e ai$- n"ortunate* t.is !as not !.at !as state$ in t.e o*icies-I" $uring t.e negotiation "or t.e

o*icies t.e arties .a$ agree$ t.at e/en t.e o!ner6s interest !ou*$ #eco/ere$ # t.e o*icies an$ t.e o*icies .a$ ina$/ertent*

#een !ritten in t.e "or% in !.ic. t.e !eree/entua** issue$ t.e *o!er court !ou*$ .a/e #een a#*e to or$er t.at t.e contract #e


11/18

re"or%e$ to gi/e e""ectto t.e% in t.e sense t.at t.e arties inten$e$ to #e #oun$- 7o!e/er t.ere is no c*ear an$ satis"actor roo"

t.at t.e o*icies "ai*e$ to re"*ect t.e rea* agree%ent #et!een t.e arties t.at !ou*$ ?usti" t.e re"or%ation o" t.ese t!o contracts-

. Heirs o8 (ore"o C. araag re3resen"e! by surviving s3ouse +ien"e #angiinan araag v. 'va +erna )e

Guan araag, e" a, G.R. No. 111*2, >8 Eu*ogio su#%itte$ to

Ka*a*uan s .ouse a secon$ a*ication "orrein state%ent inc*u$ing t.e a%ent "or t.e o/er$ue interest as !e** as "or t.e re%iu%s

$ue "or Ari* an$ =u* o" t.at ear !.ic. !as recei/e$ # Ka*a*uan s .us#an$ on .er #e.a*" an$ !as t.ere# issue$ areceit "or t.ea%ount Eu*ogio $eosite$- 7o!e/er on t.at sa%e $a Eu*ogio $ie$ o" car$ioresirator arrest secon$ar to e*ectrocution- io*eta

Eu*ogio s !i$o! "i*e$ !it. t.e Insu*ar Li"e a c*ai% "or a%ent o" t.e "u** rocee$s o" t.e o*ic #ut t.e *atter in"or%e$ .er t.at t.e

c*ai% cou*$ not #e grante$ since at t.e ti%e o" Eu*ogio6s $eat. .is o*ic .as a*rea$ *ase$ an$ .e "ai*e$ to reinstate t.e sa%e-

io*eta re0ueste$ are consi$eration o" .er c*ai% #ut t.e sa%e !as a*so re?ecte$- T.ere"ore s.e "i*e$ a co%*aint "or $eat. c*ai%

#ene"its !it. t.e RTC a**eging t.e un"air c*ai% sett*e%ent ractice o" Insu*ar Li"e an$ its $e*i#erate"ai*ure to act !it. reasona#*e

ro%tness on .er insurance c*ai%- T.e tria* court ren$ere$ a $ecision in"a/our o" Insu*ar Li"e an$ a"ter t.e "or%er $enie$ .er

%otion "or reconsi$eration s.e $irect* e*e/ate$.er case to t.e Sure%e Court /ia t.e etition "or re/ie! on Certiorari-

Issue: ;.et.er or not t.e o*ic o" Eu*ogio !as reinstate$ #e"ore .is $eat.-

Ruing:To reinstate a o*ic %eans to restore t.e sa%e to reiu%aing status a"ter it .as #eener%itte$ to *ase- 'ot. t.e o*ic

contract an$ a*ication "or reinstate%ent ro/i$e "or seci"iccon$itions "or t.e reinstate%ent o" a *ase$ o*ic-Accor$ing to t.e

A*ication "or Reinstate%ent t.e o*ic !ou*$ on* #e consi$ere$ reinstate$uon t.e aro/a* o" t.e a*ication # Insu*ar Li"e

$uring t.e a*icant s *i"eti%e an$ goo$ .ea*t.

Eu*ogio6s $eat. ?ust .ours a"ter "i*ing .is A*ication "or Reinstate%ent an$ $eositing .is a%ent "or o/er$ue re%iu%s an$

interests !it. Ka*a*uan $oes not constitute a secia* circu%stance t.at can ersua$e t.is Court to a*rea$ consi$er Po*ic No-

>,++>>5 reinstate$- Sai$ circu%stance cannot o/erri$e t.e c*ear an$ e9ress ro/isions o" t.e Po*ic Contract an$ A*ication "or

Reinstate%ent an$ oerate to re%o/e t.e rerogati/e o" Insu*ar Li"e t.ereun$er to aro/e or $isaro/e t.e A*ication "or

Reinstate%ent- E/en t.oug. t.e Court co%%iserates !it. io*eta as t.e tragic an$ "ate"u* turn o" e/ents *ea/es .er ractica**

e%t.an$e$ t.e Court cannot ar#itrari* #ur$en Insu*ar Li"e !it. t.e a%ent o" rocee$s on a *ase$ insurance o*ic- =ustice

an$ "airness %ust e0ua** a* to a** arties to a case- Courts are not er%itte$ to %ae contracts "or t.e arties- T.e "unction an$

$ut o" t.e courts consist si%* in en"orcing an$ carring out t.e contracts actua** %a$e-

1/. GAI%AN- CAGA;AN v. IN%&RANC' C-. -F N-R$H A'RICAGR No. 147*9


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FAC$%:

Intercaito* Kareting Cororation (IKC) is t.e %aer o" ;rang*er '*ue =eans- ;.i*e Le/i Strauss (P.i*s-)Inc- (LSPI) is t.e *oca*

$istri#utor o" ro$ucts #earing tra$e%ars o!ne$ # Le/i Strauss & Co- IKC an$LSPI searate* o#taine$ "ro% reson$ent Insurance

Co%an o" Nort. A%erica (ICNA) "ire insuranceo*icies "or t.eir #oo $e#t en$orse%ents re*ate$ to t.eir rea$%a$e c*ot.ing

%ateria*s !.ic. .a/e #eenso*$ or $e*i/ere$ to /arious custo%ers an$ $ea*ers o" t.e Insure$ an!.ere in t.e P.i*iines !.ic.

areunai$H4 $as a"ter t.e ti%e o" t.e *oss-Petitioner Gaisano Cagaan Inc- is a custo%er an$ $ea*er o" IKC an$ LSPI ro$ucts- It

o!ns t.e GaisanoSuerstore Co%*e9 !.ic. !as consu%e$ # "ire in +>>+- Inc*u$e$ in t.e ite%s $estroe$ in t.e "ire !erestocs o"

rea$%a$e c*ot.ing %ateria*s so*$ an$ $e*i/ere$ # IKC an$ LSPI-Reson$ent "i*e$ a co%*aint "or $a%ages against Gaisano

Cagaan Inc- a**eging t.at IKC an$ LSPI "i*e$t.eir c*ai%s un$er t.eir resecti/e "ire insurance o*icies !.ic. it ai$ t.us it !as

su#rogate$ to t.eir rig.ts-Petitioner a/erre$ it not #e .e*$ *ia#*e #ecause t.e ite%s !ere $estroe$ $ue to "ortuitous e/ent or"orce%a?eure- T.e RTC ru*e$ t.at IKC an$ LSPI retaine$ o!ners.i o" t.e $e*i/ere$ goo$s unti* "u** ai$ it%ust #ear t.e *oss (res

erit $o%ino)- T.e CA ru*e$ ot.er!ise an$ or$ere$ etitioner to a reson$entP. 5++>5,4-, an$ P. 424+2-,, t.e a%ount

ai$ # t.e *atter to IKC an$ LSPI resecti/e*-

I%%&'

;ON reson$ent %a c*ai% against etitioner "or t.e insure$ $e#t-

H'()


13/18

;.en not ot.er!ise seci"ica** ro/i$e$ "or # t.e Insurance La! t.e contract o" *i"e insurance is go/erne$ # t.e genera* ru*es o"

t.e ci/i* *a! regu*ating contracts- An$ un$er Artic*e 5,+5 o" t.e sa%e Co$e an erson !.o is "or#i$$en "ro% recei/ing an $onation

un$er Artic*e B2> cannot #e na%e$ #ene"iciar o" a "i"e insurance o*ic # t.e erson !.o cannot %ae a $onation to .i%

Co%%on*a! souses are #arre$ "ro% recei/ing $onations "ro% eac. ot.er-

Artic*e B2> ro/i$es t.at /oi$ $onations are t.ose %a$e #et!een ersons !.o !ere gui*t o" a$u*ter or concu#inage at t.e ti%e o"

$onation-

T.ere is e/er reason to .o*$ t.at t.e #ar in $onations #et!een *egiti%ate souses an$ t.ose #et!een i**egiti%ate ones s.ou*$ #e

en"orce$ in *i"e insurance o*icies since t.e sa%e are #ase$ on si%i*ar consi$eration- So *ong as %arriage re%ains t.e t.res.o*$ o"

"a%i* *a!s reason an$ %ora*it $ictate t.at t.e i%e$i%ents i%ose$ uon %arrie$ cou*e s.ou*$ *ie!ise #e i%ose$ uon e9tra

%arita* re*ations.i-

A con/iction "or a$u*ter or concu#inage isn6t re0uire$ e9acte$ #e"ore t.e $isa#i*ities %entione$ in Artic*e B2> %a e""ectuate- T.eartic*e sas t.at in t.e case re"erre$ to in No- + t.e action "or$ec*aration o" nu**it %a #e #roug.t # t.e souse o" t.e $onor or

$onee an$ t.e gui*t o" t.e $onee %a #e ro/e$ # reon$erance o" e/i$ence in t.e sa%e action-

T.e un$erscore$ c*ause neat* con/es t.at no cri%ina* con/iction "or t.e o""ense is a con$ition rece$ent- T.e *a! *ain* states t.at

t.e gui*t o" t.e art %a #e ro/e$ in t.e sa%e acting "or$ec*aration o" nu**it o" $onation- An$ it !ou*$ #e su""icient i" e/i$ence

reon$erates-

T.e insure$ !as %arrie$ to Pascua*a E#ra$o !it. !.o% s.e .as si9 *egiti%ate c.i*$ren- 7e !asa*so *i/ing in !it. .is co%%on*a!

!i"e !it. !.o% .e .as t!o c.i*$ren-

12. GARCIA +. H-NG?-NG FIR' AN) ARIN' IN%&RANC' C-. @R-NG #-(IC;

H4 P7IL +55

Fa"s:

J Garcia .a$ .is %erc.an$ise insure$ # 7ongong Fire an$ Karine Insurance Co-

J T.e insurance co%an .o!e/er %a$e a %istae an$ issue$ a o*ic co/ering t.e #ui*$ing !.ere t.e %erc.an$ise !as store$

(T.e #ui*$ing !as not o!ne$ # Garcia)

J T.e o*ic !as !ritten in Eng*is. o" !.ic. Garcia !as ignorant so .e cou*$ not .a/e notice$ t.e error o" t.e insurance co%an-

J Sai$ o*ic !as *ater on assigne$ # Garcia to PN' to secure a *oan- PN' acno!*e$ge$ receit o" sai$ o*ic re"erring to it as a

o*ic co/ering t.e %erc.an$ise-

J T.e insurance co%an %a$e t.e necessar en$orse%ents to PN'-

J T.e #ui*$ing !.ic. .ouse$ t.e %erc.an$ise !as *ater ra@e$ # "ire- T.e insurance co%an re"use$ to a $ue to t.e "act t.att.e o*ic in$icates insurance on t.e #ui*$ing an$ not on t.e %erc.an$ise-

Issue:

;.et.er or not Garcia can co**ect-

He!:


14/18

J GO en$orse%ent $ocu%ents !ere reare$ # A*c.ester in "a/or o" RC'C- T.e Court is in a 0uan$ar .o!

A*c.ester cou*$ arri/e at t.e i$ea o" en$orsing an seci"ic insurance o*ic in "a/or o" an articu*ar #ene"iciar or aee ot.er t.an

t.e insure$ .a$ not suc. na%e$ aee or #ene"iciar #een seci"ica** $isc*ose$ # t.e insure$ itse*"- It is a*so signi"icant t.at GO


15/18


16/18

4- T.is insurance is against a** riss o" *oss or $a%age to t.e su#?ect%atter insure$ #ut s.a** in no case #e $ee%e$ to e9ten$ to

co/er *oss $a%age or e9ense ro9i%ate* cause$ # $e*a or in.erent /ice or nature o" t.e su#?ect%atter insure$- C*ai%s

reco/era#*e .ereun$er s.a** #e aa#*e irresecti/e o" ercentage-

An 1a** riss o*ic1 s.ou*$ #e rea$ *itera** as %eaning a** riss !.atsoe/er an$ co/ering a** *osses # an acci$enta* cause o" an

in$- Acci$ent is construe$ # t.e courts in t.eir or$inar an$ co%%on accetance-

T.e /er nature o" t.e ter% 1a** riss1 %ust #e gi/en a #roa$ an$ co%re.ensi/e %eaning as co/ering an *oss ot.er t.an a !i**"u

an$ "rau$u*ent act o" t.e insure$- T.is is ursuant to t.e /er urose o" an 1a** riss1 insurance to gi/e rotection to t.e insure$ in

t.ose cases !.ere $i""icu*ties o" *ogica* e9*anation or so%e %ster surroun$ t.e *oss or $a%age to roert-

Institute Cargo C*auses e9ten$s to a** $a%ages3*osses su""ere$ # t.e insure$ cargo e9cet (a) *oss or $a%age or e9ense

ro9i%ate* cause$ # $e*a an$ (#) *oss or $a%age or e9ense ro9i%ate* cause$ # t.e in.erent /ice or nature o" t.e su#?ect

%atter insure$-

Genera** t.e #ur$en o" roo" is uon t.e insure$ to s.o! t.at a *oss arose "ro% a co/ere$ eri* #ut un$er an 1a** riss1 o*ic t.e

#ur$en is not on t.e insure$ to ro/e t.e recise cause o" *oss or $a%age "or !.ic. it sees co%ensation- T.e insure$ un$er an 1a*

riss insurance o*ic1 .as t.e initia* #ur$en o" ro/ing t.at t.e cargo !as in goo$ con$ition !.en t.e o*ic attac.e$ an$ t.at t.e

cargo !as $a%age$ !.en un*oa$e$ "ro% t.e /esse*- T.e #ur$en t.en s.i"ts to t.e insurer to s.o! t.e e9cetion to t.e co/erage-

T.is creates a secia* te o" insurance !.ic. e9ten$s co/erage to riss not usua** conte%*ate$ an$ a/oi$s utting uon t.e

insure$ t.e #ur$en o" esta#*is.ing t.at t.e *oss !as $ue to t.e eri* "a**ing !it.in t.e o*ics co/erage t.e insurer can a/oi$

co/erage uon $e%onstrating t.at a seci"ic ro/ision e9ress* e9c*u$es t.e *oss "ro% co/erage-

n$er an a** riss o*ic it !as su""icient to s.o! t.at t.ere !as $a%age occasione$ # so%e acci$enta* cause o" an in$ an$

t.ere is no necessit to oint to an articu*ar cause-

5- Section +2 o" t.e Insurance Co$e anone .as an insura#*e interest in roert !.o $eri/es a #ene"it "ro% its e9istence or !ou*$

su""er *oss "ro% its $estruction

Insura#*e interest in roert %a consist in (a) an e9isting interest (#) an inc.oate interest "oun$e$ on an e9isting interest or (c)

an e9ectanc cou*e$ !it. an e9isting interest in t.at out o" !.ic. t.e e9ectanc arises-

C.oa as /en$ee3consignee o" t.e goo$s in transit .as suc. e9isting interest as %a #e t.e su#?ect o" a /a*i$ contract o" insurance-

7is interest o/er t.e goo$s is #ase$ on t.e er"ecte$ contract o" sa*e- T.e er"ecte$ contract o" sa*e #et!een .i% an$ t.e s.ier o"

t.e goo$s oerates to /est in .i% an e0uita#*e tit*e e/en #e"ore $e*i/er or #e"ore con$itions .a/e #een er"or%e$-

Furt.er Artic*e +452 o" t.e Ci/i* Co$e ro/i$es t.at !.ere in ursuance o" a contract o" sa*e t.e se**er is aut.ori@e$ or re0uire$ to

sen$ t.e goo$s to t.e #uer $e*i/er o" t.e goo$s to a carrier "or t.e urose o" trans%ission to t.e #uer is $ee%e$ to #e a

$e*i/er o" t.e goo$s to t.e #uer- T.e Court .as .ereto"ore ru*e$ t.at t.e $e*i/er o" t.e goo$s on #oar$ t.e carring /esse*sartae o" t.e nature o" actua* $e*i/er since "ro% t.at ti%e t.e "oreign #uers assu%e$ t.e riss o" *oss o" t.e goo$s an$ ai$ t.e

insurance re%iu% co/ering t.e%-

III. INSURABLE INTEREST

A.CONCEPT


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1. Defnition I n eneral2 a person has an insurable interest in the subJect matter insured

here he has such a relation or connection ith2 or concern in2 such subJect matter that he

deri


18/18

e. Carrier or 4epositary I Sec. 1-) I.C.% Sec. 2 9eneral Bonded >arehouse Act8: Lope/

v. 0el osario and 1uio%ue2 && "hil. % ($%88)

2.5e"s!e o Ins!"#$e Inte!est I Secs. 1 "n, 1*") I.C.:San &i%uel (re*ery v.

La* +nion and oc- Insurance Co.2 &7 "hil. =& ($%87): n% Lin% Sin% v. !E(

Leasin% $ !inance Corporation2 &86 SC*A ;;; (877=):

(. E

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