Insurance Case Digest: Sharuff & Co. v. Baloise Fire Insurance Co. (1937)

G.R. No. 44119             March 30, 1937

Lessons Applicable: Effect of Lack of Insurable Interest (Insurance)

Laws Applicable: 

FACTS:

• Salomon Sharruf and Elias Eskenazi were doing business under the firm name of Sharruf & Co.  They insured their stocks with aloise Fire Insurance Co., Sun Insurance Office Ltd., and Springfield Insurance Co. raising it to P40,000. Elias Eskenazi having paid the corresponding premiums
• Soon they changed the name of their partnership to Sharruf & Eskenazi
• September 22, 1933: A fire ensued at their building at Muelle de la Industria street where petroleum was spilt lasting 27 minutes
• Sharruf & Co. claimed 40 cases when only 10 or 11 partly burned and scorched cases were found
• RTC: ordered Baloise Fire Insurance Co., Sun Insurance Office Ltd., and Springfield Insurance Co., to pay the partners Salomon Sharruf and Elias Eskenazi  P40,000 plus 8% interest

ISSUE: W/N Sharruf & Eskenazi has juridical personality and insurable interest

HELD: YES. Reversd.  Insurance companies are absolved.

• It does not appear that in changing the title of the partnership they had the intention of defrauding the insurance companies
• fire which broke out in the building at Nos. 299-301 Muelle de la Industria, occupied by  Sharruf & Eskenazi but no evidence sufficient to warrant a finding that they are responsible for the fire
• So great is the difference between the amount of articles insured, which the plaintiffs claim to have been in the building before the fire, and the amount thereof shown by the vestige of the fire to have been therein, that the most liberal human judgment can not attribute such difference to a mere innocent error in estimate or counting but to a deliberate intent to demand of the insurance companies payment of an indemnity for goods not existing at the time of the fire, thereby constituting the so-called "fraudulent claim" which, by express agreement between the insurers and the insured, is a ground for exemption of the insurers from civil liability
• acted in bad faith in presenting a fraudulent claim, they are not entitled to the indemnity claimed
• when the partners of a general partnership doing business under the firm name of "Sharruf & Co." obtain insurance policies issued to said firm and the latter is afterwards changed to "Sharruf & Eskenazi", which are the names of the same and only partners of said firm "Sharruf & Co.", continuing the same business, the new firm acquires the rights of the former under the same policies;