GR 35848; (November, 1932) (2) (Digest)
G.R. No. 35848 , 35849, 35850. November 22, 1932.
THE EAST FURNITURE INC., plaintiff-appellant, vs. THE GLOBE & RUTGERS FIRE INSURANCE CO. OF NEW YORK, COMMERCIAL UNION ASSURANCE COMPANY, LTD., and THE CONTINENTAL INSURANCE CO. OF NEW YORK, defendants-appellees.
FACTS
The East Furniture Inc. filed three separate actions to recover a total of P20,000 from three fire insurance companies after its establishment burned on March 2, 1929. The defendants denied liability, alleging the fire was of intentional origin, the claims were fraudulent, the plaintiff had mortgaged the furniture (creating another interested party), and the plaintiff violated policy conditions by refusing to furnish a physical inventory. The trial court consolidated the cases and dismissed the complaints, finding the claims “notoriously fraudulent.” The plaintiff appealed.
ISSUE
1. Whether the fire was of intentional origin.
2. Whether the plaintiff’s claims of loss were fraudulent.
RULING
The Supreme Court affirmed the trial court’s dismissal of the complaints, but on the ground that the fire was of intentional origin, not on the ground of fraudulent claims.
1. On the origin of the fire: The Court found the fire was intentionally set. Evidence showed three cans of gasoline and gasoline-soaked kapok were found on the second floor after the fire. The manager’s explanation was unsatisfactory. Testimony from Eugenio Lim Pineda and Attorney Eriberto de Silva indicated the manager, Filoteo Miranda, had prior intent to burn the store due to financial distress. Pineda was acquitted in a related slander case because his accusation that Miranda caused the fire was proven true. The plaintiff was also heavily indebted at the time.
2. On the fraudulent claims: The majority did not find it necessary to rule definitively on this issue, having resolved the case on the first defense. However, the dissenting opinion expressed doubt about the fraud finding, noting the claim, while high, might have been within the bounds of negotiation, and the plaintiff’s inventory showed a significant value two months prior.
The Court held that an intentionally caused fire is a valid defense against a claim on a fire insurance policy. The plaintiff’s violation of policy conditions (by mortgaging the property without consent and refusing to furnish an inventory) also barred recovery. The complaints were dismissed.
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