G.R. No. 138737, July 12, 2001
Finman General Assurance Corporation, petitioner, vs. Court of Appeals and Usiphil Incorporated, respondents.

FACTS

On September 15, 1981, private respondent Usiphil Incorporated obtained a fire insurance policy (Policy No. F3100) from petitioner Finman General Assurance Corporation. In 1982, private respondent filed an insurance claim for P987,126.11 for loss of insured properties due to fire. Petitioner appointed Adjuster H.H. Bayne, who required private respondent to submit a formal claim and proof of loss. Private respondent complied by submitting its Sworn Statement of Loss and Formal Claim and a Proof of Loss. After a meeting between their representatives, petitioner’s Finance Manager and private respondent’s Accounting Manager signed a Statement/Agreement on February 28, 1985, indicating the amount due was P842,683.40. Despite demands, petitioner refused to pay, leading private respondent to file a complaint. Petitioner defended its denial by citing private respondent’s alleged failure to comply with Policy Condition No. 13 regarding submission of specific documents, as outlined in two letters from H.H. Bayne. The trial court ruled in favor of private respondent, ordering petitioner to pay P842,683.40 with 24% interest per annum from February 28, 1985, attorney’s fees, exemplary damages, and costs. The Court of Appeals affirmed with modification, setting the interest to run from May 3, 1985.

ISSUE

1. Whether private respondent’s failure to submit documents as required under Policy Condition No. 13 justifies the denial of its insurance claim.
2. Whether the award of 24% interest per annum on the claim is proper.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals’ decision.
1. On the first issue, the Court held that private respondent substantially complied with the policy requirements. The factual findings of the trial court and Court of Appeals, which are entitled to great weight, established that private respondent submitted its Sworn Statement of Loss, Formal Claim, and Proof of Loss. The agreement signed by both parties’ representatives on February 28, 1985, fixing the amount due, constituted an ascertainment of loss as contemplated by the policy. The insurer’s active participation in the adjustment process, leading to this agreement, estopped it from denying liability based on a technicality. The purpose of the required documents is to enable the insurer to ascertain the loss, which was already achieved through the adjustment and agreement.
2. On the second issue, the Court upheld the award of 24% interest per annum. The insurance policy itself provided that if the loss is not paid within the prescribed time, the assured is entitled to interest at twice the ceiling prescribed by the Monetary Board, unless the refusal is based on a fraudulent claim. The agreement ascertaining the loss was signed on April 2, 1985, and under the policy, petitioner had 30 days, or until May 2, 1985, to pay. Its failure to pay within this period obligated it to pay the stipulated interest.