Laws Applicable:
FACTS:
- Saura Import & Export Co Inc., mortgaged to the Phil. National Bank, a parcel of land.
- The mortgage was amended to guarantee an increased amount, bringing the total mortgaged debt to P37,000
- On the land mortgage is a building owned by Saura Import & Export Co Inc. which was insured with Philippine International Surety (Insurer) even before the mortgage contract so it was required to endorse to mortgagee PNB
- October 15, 1954: Barely 13 days after the issuance of the fire insurance policy, the insurer cancelled it. Notice of the cancellation was given to PNB (mortgagee). But Saura (insured) was not informed.
- April 6, 1955: The building and all its contents worth P40,685.69 were burned so Saura filed a claim with the Insurer and mortgagee Bank
- RTC: dismissed
ISSUE: W/N
HELD:YES. Appealed from is hereby reversed. Philippine International Surety Co., Inc., to pay Saura Import & Export Co., Inc., P29,000
- It was the primary duty of Philippine International Surety to notify the insured, but it did not
- If a mortgage or lien exists against the property insured, and the policy contains a clause stating that loss, if any, shall be payable to such mortgagee or the holder of such lien as interest may appear, notice of cancellation to the mortgagee or lienholder alone is ineffective as a cancellation of the policy to the owner of the property.
- liability attached principally the insurance company, for its failure to give notice of the cancellation of the policy to Saura
- it is unnecessary to discuss the errors assigned against appellee bank