GR 982; (January, 1904) (Digest)
G.R. No. 982 : January 4, 1904
LIM-JUCO, plaintiff-appellant, vs. LIM-YAP, defendant-appellee.
FACTS:
The plaintiff, Lim-Juco, sued the defendant, Lim-Yap, for damages amounting to 13,000 pesos, alleging a breach of contract for the defendant’s failure to execute a valid and enforceable insurance policy on a cargo of 3,000 sacks of rice. The defendant, acting as an agent for an insurance company, had issued a policy on the rice. However, prior to this contract, the plaintiff had already entered into a separate insurance contract for the same cargo with another company through the firm Germann & Co. The vessel carrying the rice was wrecked, resulting in the total loss of the cargo. The plaintiff was fully indemnified for the loss, receiving the sum of 13,000 pesos from Germann & Co., the agent of the first insurer. The plaintiff then sought to recover the same amount from the defendant, arguing that the policy issued by the defendant was defective in form and therefore void.
ISSUE:
Whether the plaintiff is entitled to recover damages from the defendant for the alleged breach of contract, considering that the plaintiff had already been fully indemnified for the loss by the first insurer.
RULING:
No. The Supreme Court affirmed the lower court’s judgment in favor of the defendant. The Court held that, pursuant to Article 782 of the Code of Commerce, when multiple insurance contracts are taken on the same property, only the first contract subsists if it covers the full value of the insured property. Subsequent insurers are relieved from liability. Since the plaintiff had already recovered the full value of the lost cargo from the first insurer (Germann & Co.), the second contract with the defendant’s company was null and void by operation of law. Consequently, the defendant incurred no obligation under the second policy. The Court further ruled that no action for damages could lie against the defendant agent, as the law prohibits a double recovery for the same loss. The plaintiff’s claim was deemed unjust and an attempt to circumvent this legal prohibition.