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    General Insurance V NG Hua

    Uploaded by

    Morgana Blackhawk
    This case involves a dispute over an insurance claim filed by Ng Hua after a fire destroyed his factory. [1] Ng Hua had insured the factory goods with General Insurance for $10,000 and with General Indemnity for $20,000, but did not disclose the second policy to General Insurance. [2] The court found that Ng Hua violated the terms of the General Insurance policy, which required disclosure of other insurances, resulting in forfeiture of benefits. [3] Ng Hua argued General Insurance knew about the other policy, but the court found no evidence supporting this claim.

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    General Insurance V NG Hua

    Uploaded by

    Morgana Blackhawk
    53 views2 pages
    This case involves a dispute over an insurance claim filed by Ng Hua after a fire destroyed his factory. [1] Ng Hua had insured the factory goods with General Insurance for $10,000 and with General Indemnity for $20,000, but did not disclose the second policy to General Insurance. [2] The court found that Ng Hua violated the terms of the General Insurance policy, which required disclosure of other insurances, resulting in forfeiture of benefits. [3] Ng Hua argued General Insurance knew about the other policy, but the court found no evidence supporting this claim.

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    General Insurance v Ng Hua

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    This case involves a dispute over an insurance claim filed by Ng Hua after a fire destroyed his factory. [1] Ng Hua had insured the factory goods with General Insurance for $10,000 and with General Indemnity for $20,000, but did not disclose the second policy to General Insurance. [2] The court found that Ng Hua violated the terms of the General Insurance policy, which required disclosure of other insurances, resulting in forfeiture of benefits. [3] Ng Hua argued General Insurance knew about the other policy, but the court found no evidence supporting this claim.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    53 views2 pages

    General Insurance V NG Hua

    Uploaded by

    Morgana Blackhawk
    This case involves a dispute over an insurance claim filed by Ng Hua after a fire destroyed his factory. [1] Ng Hua had insured the factory goods with General Insurance for $10,000 and with General Indemnity for $20,000, but did not disclose the second policy to General Insurance. [2] The court found that Ng Hua violated the terms of the General Insurance policy, which required disclosure of other insurances, resulting in forfeiture of benefits. [3] Ng Hua argued General Insurance knew about the other policy, but the court found no evidence supporting this claim.

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    of 2

    General Insurance v Ng Hua, GR L-14373, 30 January 1960

    Facts:
    On April 15, 1952, the defendant General Insurance and Surety Corporation issued its insurance
    Policy No. 471, insuring against fire, for one year, the stock in trade of the Central Pomade
    Factory owned by Ng Hua, the court insured. The next day, the Pomade factory building burned,
    resulting in destruction by fire of the insured properties. Ng Hua claimed indemnity from the
    insurer. The policy covered damages up to P10,000.00; but after some negotiations and upon
    suggestion of the Manila Adjustment Company, he reduced the claim of P5,000.00.
    Nevertheless, the defendant insurer refused to pay for various reasons, namely (a) action was
    not filed in time; (b) violation of warranty; (c) submission of fraudulent claim; and (f) failure to pay
    the premium.

    The aforesaid Policy No. 471 contains this stipulation on the back thereof;.

    3. The insured shall give notice to the company of any insurance or insurances already
    affected, or which may subsequently be effected, covering any of the property hereby
    insured, and unless such notice be given and the particulars of such insurance or
    insurances be stated in or endorsed on this Policy by or on behalf of the Company before
    the occurrence of any loss or damage, all benefits under the policy shall be forfeited.
    (Emphasis ours.)

    The face of the policy bore the annotation: "Co-Insurance Declared — NIL"

    It is undenied that Ng Hua had obtained fire insurance on the same goods, for the same period
    of time, in the amount of P20,000.00 from General Indemnity Co. However, the Court of Appeals
    referring to the annotation and overruling the defense, held that there was no violation of the
    above clause, inasmuch as "co-insurance exists when a condition of the policy requires the
    insured to bear ratable proportion of the loss when the value of the insured property exceeds the
    face value of the policy," hence there is no co-insurance here.

    Ruling:
     Undoubtedly, co-insurance exists under the condition described by the appellate court. But that
    is one kind of co-insurance. It is not the only situation where co-insurance exists. Other insurers
    of the same property against the same hazard are sometimes referred as co-insurers and the
    ensuing combination as co-insurance.1 And considering the terms of the policy which required
    the insured to declare other insurances, the statement in question must be deemed to be a
    statement (warranty) binding on both insurer and insured, that there were no other insurance on
    the property. Remember it runs "Co-Insurance declared"; emphasis on the last word. If "Co-
    Insurance" means that the Court of Appeals says, the annotation served no purpose. It would
    even be contrary to the policy itself, which in its clause No. 17 made the insured a co-insurer
    for the excess of the value of the property over the amount of the policy.

    The annotation then, must be deemed to be a warranty that the property was not insured by any
    other policy. Violation thereof entitles the insurer to rescind. (Sec. 69. Insurance Act) Such
    misrepresentation is fatal in the light of our views in Santa Ana vs. Commercial Union Assurance
    Company, Ltd., 55 Phil., 329. The materiality of non-disclosure of other insurance policies is not
    open to doubt.
    Furthermore, even if the annotations were overlooked, the defendant insurer would still be free
    from liability because there is no question that the policy issued by General Indemnity had
    not been stated in nor endorsed on Policy No. 471 of defendant. And as stipulated in the above-
    quoted provisions of such policy "all benefit under this policy shall be forfeited." 2

    To avoid the dissastrous effect of the misrepresentation or concealment of the other insurance
    policy, Ng Hua alleges "actual knowledge" on the part of General insurance of the fact that he
    had taken out additional insurance with General Indemnity. He does not say when such
    knowledge was acquired or imparted. If General Insurance know before issuing its policy
    or before the fire, such knowledge might overcome the insurer's defense. 3 However, the Court of
    Appeals found no evidence of such knowledge. 

    All the above considerations lead to the conclusion that the defendant insurer successfully
    established its defense of warranty breach or concealment of the other insurance and/or violation
    of the provision of the policy above-mentioned.

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