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    OK - Geagonia v. CA

    Uploaded by

    Lizzy Liezel
    1. The petitioner obtained a fire insurance policy from the private respondent to insure his stock-in-trade. However, the policy contained a condition requiring the petitioner to disclose any other existing fire insurance policies covering the same property. 2. At the time of a fire that destroyed the petitioner's stock, it was discovered that he had two other existing fire insurance policies from another company that he did not disclose. The private respondent denied his insurance claim due to the violation of this condition. 3. The Court ruled that the petitioner did know about the other two policies based on a letter he sent. While conditions resulting in forfeiture are interpreted strictly, the condition in question only prohibited double insurance exceeding PHP 200,000

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    OK - Geagonia v. CA

    Uploaded by

    Lizzy Liezel
    120 views2 pages
    1. The petitioner obtained a fire insurance policy from the private respondent to insure his stock-in-trade. However, the policy contained a condition requiring the petitioner to disclose any other existing fire insurance policies covering the same property. 2. At the time of a fire that destroyed the petitioner's stock, it was discovered that he had two other existing fire insurance policies from another company that he did not disclose. The private respondent denied his insurance claim due to the violation of this condition. 3. The Court ruled that the petitioner did know about the other two policies based on a letter he sent. While conditions resulting in forfeiture are interpreted strictly, the condition in question only prohibited double insurance exceeding PHP 200,000

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    Geagonia case

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    8. OK -- Geagonia v. CA (1)

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    1. The petitioner obtained a fire insurance policy from the private respondent to insure his stock-in-trade. However, the policy contained a condition requiring the petitioner to disclose any other existing fire insurance policies covering the same property. 2. At the time of a fire that destroyed the petitioner's stock, it was discovered that he had two other existing fire insurance policies from another company that he did not disclose. The private respondent denied his insurance claim due to the violation of this condition. 3. The Court ruled that the petitioner did know about the other two policies based on a letter he sent. While conditions resulting in forfeiture are interpreted strictly, the condition in question only prohibited double insurance exceeding PHP 200,000

    Copyright:

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

    OK - Geagonia v. CA

    Uploaded by

    Lizzy Liezel
    1. The petitioner obtained a fire insurance policy from the private respondent to insure his stock-in-trade. However, the policy contained a condition requiring the petitioner to disclose any other existing fire insurance policies covering the same property. 2. At the time of a fire that destroyed the petitioner's stock, it was discovered that he had two other existing fire insurance policies from another company that he did not disclose. The private respondent denied his insurance claim due to the violation of this condition. 3. The Court ruled that the petitioner did know about the other two policies based on a letter he sent. While conditions resulting in forfeiture are interpreted strictly, the condition in question only prohibited double insurance exceeding PHP 200,000

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    ARMANDO GEAGONIA, petitioner, v.

    COURT OF APPEALS and


    COUNTRY BANKERS INSURANCE CORPORATION, respondents.
    G.R. No. 114427 February 6, 1995
    FACTS: Petitioner Armando Geagonia obtained from the private respondent fire
    insurance for his business Normans Mart which covered the following: "Stock-intrade consisting principally of dry goods such as RTW's for men and women wear
    and other usual to assured's business." The policy contained the following condition:
    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 or properties consisting of stocks in trade, goods in
    process and/or inventories only hereby insured, and unless such notice be
    given and the particulars of such insurance or insurances be stated therein or
    endorsed in this policy pursuant to Section 50 of the Insurance Code, by or on
    behalf of the Company before the occurrence of any loss or damage, all
    benefits under this policy shall be deemed forfeited, provided however, that
    this condition shall not apply when the total insurance or insurances in force
    at the time of the loss or damage is not more than P200,000.00.
    A fire of accidental origin broke out at the public and the petitioner's insured
    stock-in-trade were completely destroyed prompting him to file with the private
    respondent a claim under the policy. The private respondent denied the claim
    because it found that at the time of the loss the petitioner's stocks-in-trade were
    likewise covered by fire insurance policies issued by the Cebu Branch of the
    Philippines First Insurance Co., Inc. The basis of the private respondent's denial was
    the petitioner's alleged violation of Condition 3 of the policy.
    Petitioner then filed a complaint against the private respondent in the
    Insurance Commission for the recovery of P100,000.00 under fire insurance policy
    and damages. He claimed that he knew the existence of the other two policies. But,
    he said that he had no knowledge of the provision in the private respondent's policy
    requiring him to inform it of the prior policies and this requirement was not
    mentioned to him by the private respondent's agent. The Insurance Commission
    found that the petitioner did not violate Condition 3 as he had no knowledge of the
    existence of the two fire insurance policies obtained from the PFIC; that it was Cebu
    Tesing Textiles w/c procured the PFIC policies w/o informing him or securing his
    consent; and that Cebu Tesing Textile, as his creditor, had insurable interest on the
    stocks. The Insurance Commission then ordered the respondent company to pay
    complainant the sum of P100,000.00 with interest and attorneys fees. CA reversed
    the decision of the Insurance Commission because it found that the petitioner knew
    of the existence of the two other policies issued by the PFIC. Hence, this petition.
    ISSUES:
    1. Whether the petitioner had prior knowledge of the two insurance policies
    issued by the PFIC when he obtained the fire insurance policy from the
    private respondent, thereby, for not disclosing such fact, violating Condition 3
    of the policy.
    2. Whether petitioner is precluded from recovering insurance claims.
    HELD:
    1. The Court agrees with the Court of Appeals that the petitioner knew of the
    prior policies issued by the PFIC. His letter of 18 January 1991 to the private

    respondent conclusively proves this knowledge. His testimony to the contrary


    before the Insurance Commissioner and which the latter relied upon cannot
    prevail over a written admission made ante litem motam. It was, indeed,
    incredible that he did not know about the prior policies since these policies
    were not new or original.
    2. Provisions, conditions or exceptions in policies which tend to work a forfeiture
    of insurance policies should be construed most strictly against those for
    whose benefits they are inserted, and most favorably toward those against
    whom they are intended to operate. The reason for this is that, except for
    riders which may later be inserted, the insured sees the contract already in
    its final form and has had no voice in the selection or arrangement of the
    words employed therein. With these principles in mind, the Court is of the
    opinion that Condition 3 of the subject policy is not totally free from
    ambiguity and must, perforce, be meticulously analyzed. Such analysis leads
    us to conclude that (a) the prohibition applies only to double insurance, and
    (b) the nullity of the policy shall only be to the extent exceeding P200,000.00
    of the total policies obtained. Furthermore, by stating within Condition 3 itself
    that such condition shall not apply if the total insurance in force at the time of
    loss does not exceed P200,000.00, the private respondent was amenable to
    assume a co-insurer's liability up to a loss not exceeding P200,000.00. What
    it had in mind was to discourage over-insurance. Indeed, the rationale behind
    the incorporation of "other insurance" clause in fire policies is to prevent
    over-insurance and thus avert the perpetration of fraud. When a property
    owner obtains insurance policies from two or more insurers in a total amount
    that exceeds the property's value, the insured may have an inducement to
    destroy the property for the purpose of collecting the insurance. The public as
    well as the insurer is interested in preventing a situation in which a fire would
    be profitable to the insured.

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