G.R. No. 257086, April 23, 2025
WILFRIDO C. WIJANGCO, REPRESENTED BY HIS SON, ANDREW C. WIJANGCO, PETITIONER, VS. UCPB GENERAL INSURANCE CO., INC., RESPONDENT.

FACTS

Petitioner Wilfrido Wijangco’s vehicle, insured with respondent UCPB General Insurance Co., Inc., was forcibly taken at gunpoint from his son, Andrew, on August 24, 2006. The incident was immediately reported to the police, and a blotter entry was made. Wilfrido subsequently filed a claim with UCPB Insurance, submitting all required documents. However, UCPB Insurance withheld action on the claim, informing Wilfrido in a letter dated March 21, 2007, that the vehicle had been recovered by the Traffic Management Group (TMG) and was under investigation. The insurer stated it would hold the claim open for 60 days and close its file if no TMG clearance was issued. Despite Wilfrido’s efforts to verify the vehicle’s status with TMG, he received no confirmation of recovery or any clearance.

ISSUE

The core issue is whether UCPB Insurance is liable to pay the insurance claim for the carnapped vehicle, given the insurer’s assertion that the vehicle was recovered and its subsequent denial of the claim based on the alleged recovery.

RULING

Yes, UCPB Insurance is liable. The Supreme Court reversed the Court of Appeals and reinstated the trial court’s decision in favor of Wijangco. The legal logic hinges on the principle that the insurer bears the burden of proof to establish a policy defense that would exclude its liability. UCPB Insurance’s defense was that the vehicle had been recovered, thereby negating a total loss. However, the insurer failed to present conclusive evidence of such recovery. Its sole basis was an unverified internal communication referencing a TMG investigation. Crucially, UCPB did not present a Certificate of Non-Recovery from the TMG or the Land Transportation Office, nor did it furnish any official document or physical proof definitively showing the vehicle was returned to Wijangco’s possession. Mere allegation of recovery is insufficient. Since the insurer did not satisfactorily prove the fact of recovery—a fact peculiarly within its knowledge as it initiated the information—it cannot evade its contractual obligation. The insured complied with all claim requirements by reporting the loss and submitting documents. The insurer’s unjustified refusal to pay, based on an unsubstantiated defense, constitutes a breach of contract in bad faith, warranting the award of the insured amount, legal interest, and damages.