GR 52080; (May, 1993) (Digest)
G.R. No. L-52080 May 28, 1993
Government Service Insurance System, petitioner-appellant, vs. The Court of Appeals and Agricultural Credit Administration (ACA), respondents-appellees.
FACTS
The Government Service Insurance System (GSIS) issued two fire insurance policies to the Agricultural Credit Administration (ACA) covering Virginia leaf tobacco stored in Warehouse F in Baesa, Novaliches, Quezon City. A fire on February 15, 1962, destroyed the warehouse and its contents. ACA filed a claim. Pursuant to the open policy clause, GSIS employed adjusters who, after investigation, recommended a settlement based on finding 15,467 hogsheads of tobacco present at the time of the fire. GSIS offered a final settlement of P13,500,000.00, which ACA accepted under conditions stipulated in a December 7, 1964 letter from GSIS and accepted by ACA on December 16, 1964. The conditions were: (1) the burden of proving any claim for additional indemnity beyond P13,500,000.00 rests on ACA; and (2) ACA shall present additional proof and evidence for further indemnity to a competent court for adjudication. GSIS paid the amount. Claiming an actual loss of P23,610,571.61, ACA filed an action to recover the difference of P10,110,571.61. The trial court dismissed the complaint. The Court of Appeals initially affirmed but, upon reconsideration, reversed and awarded the balance to ACA. GSIS filed the present petition.
ISSUE
The decisive issue is the quantity of tobacco stored in Warehouse F at the time of the fire, which determines the actual loss and any additional indemnity due.
RULING
The Supreme Court annulled and set aside the resolutions of the Court of Appeals dated May 7, 1979, and November 23, 1979, and dismissed ACA’s complaint. The Court held that ACA’s own documentary evidence, specifically Exhibits QQ to QQ-2024, established that 15,669 hogsheads of tobacco were withdrawn from the warehouse from 1955 to 1959. Additional documentary evidence, Exhibits 134 to 368 (delivery orders from August 13 to 16, 1959), showed further withdrawals of 1,944 hogsheads. This totaled 17,613 hogsheads withdrawn. Deducting this from the total hogsheads originally stored left only 15,457 hogsheads inside at the time of the fire, supporting GSIS’s position. The Court ruled that documentary evidence prevails over the testimonial evidence presented by ACA’s witnesses, which was an attempt to explain away the documents. The documentary evidence clearly supported GSIS’s calculation of the loss.