Lessons Applicable: Requisites of Double insurance (Insurance)
FACTS:
- May 15, 1981: Western Guaranty Corporation issued Fire Insurance Policy to New Life Enterprises foar P350,000
- renewed on May, 13, 1982
- July 30,1981: Reliance Surety and Insurance Co., Inc. issued Fire Insurance Policy to New Life Enterprises for P300,000
- November 12, 1981; Additional P700,000
- February 8, 1982: Equitable Insurance Corporation issued Fire Insurance Policy to New Life Enterprises for P200,000
- October 19, 1982 2 am: fire electrical in nature destroyed the stock in trade worth P1,550,000
- Julian Sy went to Reliance to claim but he was refused. Same thing happened with the others who were sister companies.
- Sy violated the "Other Insurance Clause"
- RTC: favored New Life and against the three insurance companies
- CA: reversed -failure to state or endorse the other insurance coverage
ISSUE: W/N Sy can claim against the three insurance companies for violating the "Other Insurance Clause"
HELD: NO.
- The terms of the contract are clear and unambiguous.
- The insured is specifically required to disclose to the insurer any other insurance and its particulars which he may have effected on the same subject matter.
- The knowledge of such insurance by the insurer's agents, even assuming the acquisition thereof by the former, is not the "notice" that would estop the insurers from denying the claim.
- conclusion of the trial court that Reliance and Equitable are "sister companies" is an unfounded conjecture drawn from the mere fact that Yap Kam Chuan was an agent for both companies which also had the same insurance claims adjuster
- Availmentof the services of the same agents and adjusters by different companies is a common practice in the insurancebusiness and such facts do not warrant the speculative conclusion of the trial court.
- The conformity of the insured to the terms of the policy isimplied from his failure to express any disagreement with what is provided for.
- a clear misrepresentation and a vital one because where the insured had been asked to reveal but did not, that was deception - guilty of clear fraud
- total absence of such notice nullifies the policy
- assuming arguendo that petitioners felt the legitimate need to be clarified as to the policy condition violated, there was a considerable lapse of time from their receipt of the insurer's clarificatory letter dated March 30, 1983, up to the time the complaint was filed in court on January 31, 1984. The one-year prescriptive period was yet toexpire on November 29, 1983, or about eight (8) months from the receipt of the clarificatory letter, but petitioners let the period lapse without bringing their action in court
