GR 85624; (June, 1989) (Digest)
G.R. No. 85624 June 5, 1989
CATHAY INSURANCE CO., INC., EMPIRE INSURANCE CO., UNION INSURANCE SOCIETY OF CANTON, LTD., PARAMOUNT INSURANCE CORP., PHILIPPINE BRITISH INSURANCE CO., & PHILIPPINE FIRST INSURANCE CO., petitioners, vs. HON. COURT OF APPEALS & EMILIA CHAN LUGAY, respondents.
FACTS
Petitioners are six insurance companies that collectively issued seven fire insurance policies, totaling P4,000,000, covering the stocks and merchandise of private respondent Emilia Chan Lugay’s business, Cebu Filipina Press. All policies, except one, were renewals of earlier coverage. On December 18, 1981, the press was destroyed by an electrical fire. Lugay submitted her sworn statement of loss and formal claims on January 15, 1982. After nearly ten months of waiting without payment, she filed a collection suit on December 15, 1982.
The insurers denied liability, citing alleged violations of policy conditions and misdeclaration. During pre-trial, they offered to settle for 50% of the claim, which Lugay refused. The trial court ruled in Lugay’s favor, ordering each insurer to pay its respective policy amount, plus expenses, attorney’s fees, and interest at twice the Monetary Board ceiling from the filing of the complaint. The Court of Appeals affirmed the decision in toto, prompting this petition.
ISSUE
The core issues, as framed by the petitioners, involve: 1) whether Lugay’s action was premature; 2) the sufficiency of the proofs of loss; 3) the validity of the claimed loss amount; 4) the propriety of awarding double interest; and 5) the reasonableness of the attorney’s fees awarded.
RULING
The Supreme Court denied the petition, affirming the Court of Appeals with modification on attorney’s fees. The Court held that the petitioners’ grounds largely raised factual issues, which are beyond the scope of a Rule 45 review limited to questions of law. It deferred to the concurrent factual findings of the trial and appellate courts, which found that Lugay’s cause of action had accrued, her proofs of loss were sufficient, and her claimed loss was validly supported.
On the legal issues, the award of double interest was justified under Sections 243 and 244 of the Insurance Code. These provisions mandate such interest when payment is unreasonably delayed. The trial court’s explicit finding of unreasonable delay created a prima facie case under the law. Furthermore, the filing of the suit due to this delay legally entitled Lugay to damages, including attorney’s fees. However, the Court deemed the awarded 20% attorney’s fees excessive, reducing it to a more reasonable 10% of the policy proceeds. Costs were imposed against the petitioners.