Professional Documents
Culture Documents
The interest of 12% on the principal obligation 3.The penalty of 12% for
late payment for after demand, Moonwalk would be in delay and
therefore liable for the penalty.
RCBC v. CA - Insurance Proceeds
289 SCRA 292 (1998)
Facts:
> GOYU applied for credit facilities and accommodations with RCBC.
After due evaluation, a credit facility in the amount of P30 million was
initially granted. Upon GOYU's application increased GOYU's credit
facility to P50 million, then to P90 million, and finally to P117 million
> As security for its credit facilities with RCBC, GOYU executed two
REM and two CM in favor of RCBC, which were registered with the
Registry of Deeds at. Under each of these four mortgage contracts,
GOYU committed itself to insure the mortgaged property with an
insurance company approved by RCBC, and subsequently, to endorse
and deliver the insurance policies to RCBC.
> GOYU obtained in its name a total of 10 insurance policies from
MICO. In February 1992, Alchester Insurance Agency, Inc., the
insurance agent where GOYU obtained the Malayan insurance policies,
issued nine endorsements in favor of RCBC seemingly upon
instructions of GOYU
> On April 27, 1992, one of GOYU's factory buildings in Valenzuela was
gutted by fire. Consequently, GOYU submitted its claim for indemnity.
> MICO denied the claim on the ground that the insurance policies
were either attached pursuant to writs of attachments/garnishments
issued by various courts or that the insurance proceeds were also
claimed by other creditors of GOYU alleging better rights to the
proceeds than the insured.
> GOYU filed a complaint for specific performance and damages.
RCBC, one of GOYU's creditors, also filed with MICO its formal claim
over the proceeds of the insurance policies, but said claims were also
denied for the same reasons that AGCO denied GOYU's claims.
> However, because the endorsements do not bear the signature of
any officer of GOYU, the trial court, as well as the Court of Appeals,
concluded that the endorsements are defective and held that RCBC has
no right over the insurance proceeds.
Issue:
Whether or not RCBC has a right over the insurance proceeds.
Held:
RCBC has a right over the insurance proceeds.
It is settled that a mortgagor and a mortgagee have separate and
distinct insurable interests in the same mortgaged property, such that
each one of them may insure the same property for his own sole
benefit. There is no question that GOYU could insure the mortgaged
property for its own exclusive benefit. In the present case, although it
appears that GOYU obtained the subject insurance policies naming
itself as the sole payee, the intentions of the parties as shown by their
contemporaneous acts, must be given due consideration in order to
better serve the interest of justice and equity.
GOYU cannot seek relief under Section 53 of the Insurance Code which
provides that the proceeds of insurance shall exclusively apply to the
interest of the person in whose name or for whose benefit it is made.
The peculiarity of the circumstances obtaining in the instant case
presents a justification to take exception to the strict application of
said provision, it having been sufficiently established that it was the
intention of the parties to designate RCBC as the party for whose
benefit the insurance policies were taken out. Consider thus the
following:
1.
It is undisputed that the insured pieces of property were the
subject of mortgage contracts entered into between RCBC and GOYU in
consideration of and for securing GOYU's credit facilities from RCBC.
The mortgage contracts contained common provisions whereby GOYU,
as mortgagor, undertook to have the mortgaged property properly
covered against any loss by an insurance company acceptable to
RCBC.
2.
GOYU voluntarily procured insurance policies to cover the
mortgaged property from MICO, no less than a sister company of RCBC
and definitely an acceptable insurance company to RCBC.
3.
Endorsement documents were prepared by MICO's underwriter,
Alchester Insurance Agency, Inc., and copies thereof were sent to
GOYU, MICO and RCBC. GOYU did not assail, until of late, the validity of
said endorsements.
4.
GOYU continued until the occurrence of the fire, to enjoy the
benefits of the credit facilities extended by RCBC which was
conditioned upon the endorsement of the insurance policies to be
taken by GOYU to cover the mortgaged properties.
This Court can not over stress the fact that upon receiving its copies of
the endorsement documents prepared by Alchester, GOYU, despite the
absence written conformity thereto, obviously considered said
endorsement to be sufficient compliance with its obligation under the
mortgage contracts since RCBC accordingly continued to extend the
benefits of its credit facilities and GOYU continued to benefit therefrom.
Just as plain too is the intention of the parties to constitute RCBC as the
beneficiary of the various insurance policies obtained by GOYU. The
intention of the parties will have to be given full force and effect in this
particular case. The insurance proceeds may, therefore, be exclusively
applied to RCBC, which under the factual circumstances of the case, is
truly the person or entity for whose benefit the policies were clearly
intended.
Barzaga v CA Digest
G.R. No. 115129 February 12, 1997
Facts:
The petitioners wife was suffering from a debilitating ailment and with
forewarning of her impending death, she expressed her wish to be laid
to rest before Christmas day to spare her family of the long vigils as it
was almost Christmas. After his wife passed away, petitioner bought
materials from herein private respondents for the construction of her
niche. Private respondents however failed to deliver on agreed time
and date despite repeated follow-ups. The niche was completed in the
afternoon of the 27th of December, and Barzaga's wife was finally laid
to rest. However, it was two-and-a-half (2-1/2) days behind schedule.
Issue: Was there delay in the performance of the private
respondent's obligation?
Ruling: Yes. Since the respondent was negligent and incurred delay in
the performance of his contractual obligations, the petitioner is entitled
to be indemnified for the damage he suffered as a consequence of the
delay or contractual breach. There was a specific time agreed upon for
under Article 1191 of the Civ. Code. The right to rescind contracts
arises once the party defaults in the performance of his obligation.
Article 1191 should be taken in conjunction with Article 1169: Those
obliged to deliver or to do something in delay from the time the obligee
judicially or extrajudicially demands form them the fulfilment of their
obligation. However the demand from creditor shall not be necessary
in order that delay may exist.:
1. When the obligation or the law expressly so declares, or
2. When from the nature and the circumstance of the obligation it
appears that the designation of the time when the thing is to be
delivered or the service is to be rendered was a controlling motive
for the establishment of the contract; OR
3. When the demand would be useless, as when the obligor has
rendered it beyond his power to perform.
attached. It was not until few days later that the defendant finally was able to arrange for
his return to Manila.
Singson commenced an action for damages based on breach of contract of carriage
against CATHAY before the Regional Trial Court.
CATHAY alleged that there was no contract of carriage yet existing such that CATHAYs
refusal to immediately book him could not be construed as breach of contract of
carriage.
The trial court rendered a decision in favor of petitioner herein holding that CATHAY was
guilty of gross negligence amounting to malice and bad faith for which it was adjudged to
pay petitioner P20,000.00 for actual damages with interest at the legal rate of twelve
percent (12%) per annum from 26 August 1988 when the complaint was filed until fully
paid, P500,000.00 for moral damages, P400,000.00 for exemplary damages,
P100,000.00 for attorneys fees, and, to pay the costs.
On appeal by CATHAY, the Court of Appeals reversed the trial courts finding that there
was gross negligence amounting to bad faith or fraud and, accordingly, modified its
judgment by deleting the awards for moral and exemplary damages, and the attorneys
fees as well.
ISSUES:
1.) whether a breach of contract was committed by CATHAY when it failed to confirm the
booking of petitioner.
2.) whether the carrier was liable not only for actual damages but also for moral and
exemplary damages, and attorneys fees.
HELD:
1.) Yes. x x x the round trip ticket issued by the carrier to the passenger was in itself a
complete written contract by and between the carrier and the passenger. It had all the
elements of a complete written contract, to wit: (a) the consent of the contracting parties
manifested by the fact that the passenger agreed to be transported by the carrier to and
from Los Angeles via San Francisco and Hong Kong back to the Philippines, and the
carriers acceptance to bring him to his destination and then back home; (b) cause or
consideration, which was the fare paid by the passenger as stated in his ticket; and, (c)
object, which was the transportation of the passenger from the place of departure to the
place of destination and back, which are also stated in his ticket. In fact, the contract of
carriage in the instant case was already partially executed as the carrier complied with
its obligation to transport the passenger to his destination, i.e., Los Angeles. , x x x the
loss of the coupon was attributable to the negligence of CATHAYs agents and was the
proximate cause of the non-confirmation of petitioner's return flight.
2.) Yes. x x x Although the rule is that moral damages predicated upon a breach of
contract of carriage may only be recoverable in instances where the mishap results in
the death of a passenger, or where the carrier is guilty of fraud or bad faith, there are
situations where the negligence of the carrier is so gross and reckless as to virtually
amount to bad faith, in which case, the passenger likewise becomes entitled to recover
moral damages.
x x x these circumstances reflect the carriers utter lack of care and sensitivity to the
needs of its passengers, clearly constitutive of gross negligence, recklessness and
wanton disregard of the rights of the latter, acts evidently indistinguishable or no different
from fraud, malice and bad faith. As the rule now stands, where in breaching the contract
of carriage the defendant airline is shown to have acted fraudulently, with malice or in
bad faith, the award of moral and exemplary damages, in addition to actual damages, is
proper.
However, the P500,000.00 moral damages and P400,000.00 exemplary damages
awarded by the trial court have to be reduced. The well-entrenched principle is that the
grant of moral damages depends upon the discretion of the court based on the
circumstances of each case. This discretion is limited by the principle that the "amount
awarded should not be palpably and scandalously excessive" as to indicate that it was
the result of prejudice or corruption on the part of the trial court. Damages are not
intended to enrich the complainant at the expense of the defendant. They are awarded
only to alleviate the moral suffering that the injured party had undergone by reason of
the defendant's culpable action. There is no hard-and-fast rule in the determination of
what would be a fair amount of moral damages since each case must be governed by its
own peculiar facts.
In the instant case, the injury suffered by petitioner is not so serious or extensive as to
warrant an award amounting to P900,000.00. The assessment of P200,000.00 as moral
damages and P50,000.00 as exemplary damages in his favor is, in our view, reasonable
and realistic.
On the issue of actual damages, we agree with the Court of Appeals that the amount of
P20,000.00 granted by the trial court to petitioner should not be disturbed.
As regards attorney's fees, they may be awarded when the defendant's act or omission
has compelled the plaintiff to litigate with third persons or to incur expenses to protect his
interest. It was therefore erroneous for the Court of Appeals to delete the award made by
the trial court; consequently, petitioner should be awarded attorney's fees and the
amount of P25,000.00, instead of P100,000.00 earlier awarded, may be considered
rational, fair and reasonable.