G.R. No. L-9401; March 30, 1915
ANTONINA LAMPANO, plaintiff-appellee, vs. PLACIDA A. JOSE, ET AL., defendants-appellants.

FACTS:
Mariano R. Barretto constructed a house for Placida A. Jose on a lot in Manila for P6,000. Placida A. Jose later sold the house to Antonina Lampano for P6,000, with Lampano still owing P2,000 on the purchase price at the time of the events. Barretto, with Jose’s consent, had insured the house in his own name for P4,000, paying the premiums himself. The house was destroyed by fire, and Barretto collected P3,600 from the insurance company. At that time, Jose still owed Barretto P2,000 for the construction. Lampano sued both Jose and Barretto, claiming that Jose had verbally agreed to transfer the insurance policy to her at the time of the sale and that neither defendant had a right to the insurance proceeds. Jose denied any such agreement and asserted that the insurance was for Barretto’s exclusive benefit. The trial court found no privity between Lampano and Barretto but held that Barretto held the insurance in trust for Jose. It ordered Barretto to pay Jose the balance of the insurance proceeds after deducting the amount Jose owed him and the premiums, and allowed Lampano to offset her debt to Jose with that amount. Barretto appealed.

ISSUE:
Whether Mariano R. Barretto is obligated to account for the insurance proceeds to Antonina Lampano or Placida A. Jose.

RULING:
No. The Supreme Court reversed the trial court’s judgment against Barretto. The insurance policy was a personal contract between Barretto and the insurance company. Barretto had an insurable interest in the house as its builder and material supplier, and he took out the policy at his own expense, without any agreement to insure for the benefit of Jose or Lampano. Mere knowledge of another’s interest does not create an obligation to share the proceeds. Since there was no express or implied trust, contract, or assignment in favor of Jose or Lampano, Barretto was entitled to the insurance money for his own indemnity. The Court absolved Barretto from any liability to account for the proceeds to either party.