Evan Obnamia
the two are distinct and separate.
66. Tuason v. North China Insurance Co. G.R. No. L-22738. December 2, 1924,
MALCOLM, J.
DOCTRINE
An insurer who refused to pay the insurance claim, even in valid grounds, could
not claim other provisions in the policy advantageous to it such as appropriation
of the insured properties.
Disclaimer: The discussion of the ratio here is case-specific. I cannot find
anything that pertains to the character of a fire insurance in general. What I
provided above is the most relevant I could find.
FALLO
For all the foregoing, the judgment appealed from is affirmed without express
pronouncement as to costs in this instance. So ordered.
FACTS:
 A.M. Tuason owns Vanity Fair, a mercantile establishment. He insured
the merchandise and furniture within the premises of Vanity Fair with
Liverpool & London & Globe Insurance Company, Ltd., and the North
China Insurance Company under 7 policies. The merchandise and
furniture are covered under separate policies.
 A fire broke out but due to the promptness and efficiency of the Manila
Fire Department, the fire was immediately placed under control and
part of the establishment with its equipment and merchandise were
salvaged.
 The Fire Department reported the suspicious presence of dry goods
saturated with spirits or turpentine (flammable substance) which made
them conclude that the cause of the fire was intentional.
 Tuason’s claim was rejected on the ground that there is false, fraudulent,
and fictitious declarations had been made in the claim (excessive
claimed amount) and that the fire was caused by the willful act of
Tuason.
 Tuason filed 2 causes of action: (1) failure to pay insurance proceeds for
the loss of the merchandise, and (2) failure to pay insurance proceeds
for the loss of the furnitures
 RTC dismissed the complaint.
 Tuason argued that the lower court erred in holding that there is fraud
when the claimed value was much larger that was is seemed to be lost,
and that the court erred in dismissing his 2nd cause of action as well due
to the alleged existence of fraud on the 1st cause of action when in fact
 ADDITIONAL FACTS (not explicitly narrated in the ponencia, but can
be inferred in the discussion): Apparently, after North China refused to
pay Tuason, it tried to enforce a provision on the policy which transfers
the ownership of the salvaged goods to North China for proper
disposition. NC filed for a counter claim but was subsequently not
pressed, however the court still touched on this issue.
ISSUE:
Whether or not there is fraud in the act of claiming excessive amount – YES
Whether or not the court erred in dismissing both actions, including the claim
in the furniture, due to the existence of fraud - NO
Whether or not North China may take possession of the salvaged goods in
accordance with the policy- NO
RATIO:
 To prove the extent of his loss, Tuason presented a rough inventory of
the Vanity Fair which suspiciously escaped the fire while all the other
books had been consumed. According to the inventory, Vanity Fair
held merchandise valued at close to P200,000. However, various
witnesses, like the Fire Dept. Chief and 2 expert accountants, testified
that the establishment only holds at most P25,000. It is also physically
impossible for the small premises of Vanity Fair to have held
merchandise valued at close to P200,00.
 The difference between the formal claim of approximately P190,000
and the top figure of P50,000 conceded by the impartial witnesses is
so great as to indicate false statements made intentionally and
willfully.
 The court initially agrees that the 2 actions should have been treated
separately, however it held that Tuason is estopped in claiming the
same since he himself filed the joint action and that the defendants
previously filed a demurrer on the ground of misjoinder but was
overruled.
 It is now too late for plaintiff to attempt to separate fraud in the claim
of loss for the merchandise from that in the claim for the furniture. As
fraud in any part of a formal statement of loss taints the whole, as
fraud or false swearing entering into some of the items operates to
defeat a recovery upon any art of the policy, so should fraud in
 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.