GR L 15905; (October, 1920) (Digest)
G.R. No. L-15905; October 27, 1920
YU CUA, NG CHIONG ENG, JOSE DE LOS SANTOS and NG GIOC LIU, copartners doing business under the firm name and style of YU CUA & CO., plaintiff-appellants, vs. SOUTH BRITISH INSURANCE CO. (LTD.), THE PHOENIX ASSURANCE CO. (LTD.), SUN INSURANCE OFFICE, COMMERCIAL UNION ASSURANCE CO. (LTD.) and GUARDIAN ASSURANCE CO. (LTD.), defendants-appellees.
FACTS:
The plaintiff partnership, Yu Cua & Co., held seven fire insurance policies from the defendant insurance companies, with a total coverage of P110,000 on property, including palay and merchandise, stored in their bodega in San Quintin, Pangasinan. The bodega and its contents were destroyed by fire on April 4, 1919. The plaintiffs filed claims for the total amount of the policies, alleging the loss of large quantities of palay and merchandise valued at P128,062.50. The defendants rejected the claims, alleging that the actual loss was minimal (approximately P1,000 for palay and P8,000 for merchandise) and that the plaintiffs’ claims were fraudulent. The defendants also alleged the fire was caused by the plaintiffs’ willful act. The trial court consolidated the cases. After trial, the court found the evidence presented by the defendants’ witnesseswho inspected the bodega before and after the firemore credible. It concluded that the fire destroyed only a negligible amount of property and that the plaintiffs’ claims were therefore grossly exaggerated and fraudulent. The trial court dismissed the complaints, holding that by presenting fraudulent claims, the plaintiffs forfeited all benefits under the insurance policies.
ISSUE:
Whether the plaintiffs are entitled to recover on the insurance policies after having submitted fraudulent claims for loss.
RULING:
No. The Supreme Court affirmed the trial court’s decision. The Court found no reason to disturb the trial court’s factual findings, which were based on the credibility of witnesses and the physical evidence (e.g., the rapid extinguishment of the fire and the minimal ashes left behind). The insurance policies contained a clear condition that if a claim is in any respect fraudulent, all benefit under the policy shall be forfeited. By submitting a claim that was intentionally and materially falsegrossly exaggerating the value and quantity of the property lostthe plaintiffs violated this condition. Consequently, they forfeited any right to recover under the policies. The judgment dismissing the complaints was affirmed, with costs against the appellants.