Professional Documents
Culture Documents
Disclaimer: The discussion of the ratio here is case-specific. I cannot find Whether or not there is fraud in the act of claiming excessive amount – YES
anything that pertains to the character of a fire insurance in general. What I
Whether or not the court erred in dismissing both actions, including the claim
provided above is the most relevant I could find.
in the furniture, due to the existence of fraud - NO
Whether or not North China may take possession of the salvaged goods in
FALLO
accordance with the policy- NO
For all the foregoing, the judgment appealed from is affirmed without express
pronouncement as to costs in this instance. So ordered. RATIO:
FACTS: To prove the extent of his loss, Tuason presented a rough inventory of
A.M. Tuason owns Vanity Fair, a mercantile establishment. He insured the Vanity Fair which suspiciously escaped the fire while all the other
the merchandise and furniture within the premises of Vanity Fair with books had been consumed. According to the inventory, Vanity Fair
Liverpool & London & Globe Insurance Company, Ltd., and the North held merchandise valued at close to P200,000. However, various
China Insurance Company under 7 policies. The merchandise and witnesses, like the Fire Dept. Chief and 2 expert accountants, testified
furniture are covered under separate policies. that the establishment only holds at most P25,000. It is also physically
A fire broke out but due to the promptness and efficiency of the Manila impossible for the small premises of Vanity Fair to have held
Fire Department, the fire was immediately placed under control and
merchandise valued at close to P200,00.
part of the establishment with its equipment and merchandise were
The difference between the formal claim of approximately P190,000
salvaged.
and the top figure of P50,000 conceded by the impartial witnesses is
The Fire Department reported the suspicious presence of dry goods
saturated with spirits or turpentine (flammable substance) which made so great as to indicate false statements made intentionally and
them conclude that the cause of the fire was intentional. willfully.
Tuason’s claim was rejected on the ground that there is false, fraudulent, The court initially agrees that the 2 actions should have been treated
and fictitious declarations had been made in the claim (excessive separately, however it held that Tuason is estopped in claiming the
claimed amount) and that the fire was caused by the willful act of same since he himself filed the joint action and that the defendants
Tuason. previously filed a demurrer on the ground of misjoinder but was
Tuason filed 2 causes of action: (1) failure to pay insurance proceeds for overruled.
the loss of the merchandise, and (2) failure to pay insurance proceeds It is now too late for plaintiff to attempt to separate fraud in the claim
for the loss of the furnitures of loss for the merchandise from that in the claim for the furniture. As
RTC dismissed the complaint. fraud in any part of a formal statement of loss taints the whole, as
Tuason argued that the lower court erred in holding that there is fraud fraud or false swearing entering into some of the items operates to
when the claimed value was much larger that was is seemed to be lost,
defeat a recovery upon any art of the policy, so should fraud in
and that the court erred in dismissing his 2nd cause of action as well due
statements where the insured sees fit to bring an action against all of
the insurers destroy any part of the claims included in the whole.
The 11th clause of each of the policies authorizes North China to take
possession and sell the salvaged insured properties, in the event of a
claim. The court, however, ruled that the insurers cannot refuse to pay
the insurance and, at the same time, appropriate the property of the
insured. If the insurance companies, to protect their own interests,
desired to retain the goods as evidence in the case, it should be at their
expense and not at the expense of the insured.
The court declined to discuss the participation of Tuason in the fire
and its origin.