23 DE LA SALLE UNIVERSITY – COLLEGE OF LAW | INSURANCE LAW | ATTY.
SERGE CENIZA
[23] New Life Enterprises (NLE) v. CA
G.R. No. 94071, 207 SCRA 669 March 31, 1992
Petitioner: New Life Enterprise
Private Respondent: Julian Sy
Topic: Concealment
Digested by: Cindee Michelle Yu
Doctrine:
“The unrevealed insurances makes the insured guilty of
a false declaration; a clear misrepresentation and a vital
one because where the insured had been asked to
reveal but did not, that was deception.”
Facts:
 Julian Sy and Jose Sy Bang formed a business
partnership in the City of Lucena. It was named
New Life Enterprises (NLE), and the partnership
engaged in the sale of construction materials at its
place of business, a two storey building situated at
Lucena City.
 Julian Sy insured the stocks in trade of NLE to the
following insurance companies:
o Western Guaranty Corporation (350k),
o Reliance Surety and Insurance Co. Inc.,
(300k, with additional 700k)
o Equitable Insurance Corporation (200k)
 NLE was gutted by fire at about 2:00 o'clock in the
Issue:
morning of October 19, 1982; the cause of fire was
electrical in nature.
 After the fire, Julian Sy went to Reliance Insurance
and filed his claim. He averred that in support of
his claim, he submitted the fire clearance, the
insurance policies and inventory of stocks. He
further testified that the three insurance
companies are sister companies, and as a matter
of fact when he was following-up his claim with
Equitable Insurance, the Claims Manager told him
to go first to Reliance Insurance and if said
company agrees to pay, they would also pay.
 Ultimately, the three insurance companies denied
plaintiffs' claim for payment on the ground of
breach of policy conditions.
o Julian Sy apparently violated Policy Condition
No. '3' which requires the insured to give
notice of any insurance or insurances already
effected covering the stocks in trade."
 Because of the denial of their claims for payment
by the 3 insurance companies, petitioner filed
separate civil actions before RTC Lucena, which
cases were consolidated for trial.
 RTC: in favor of New Life and ordered the insurance
companies to pay.
 CA: reversed.
W/N the forfeiture of the benefits under the insurance
contract is warranted? – YES.
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23 DE LA SALLE UNIVERSITY – COLLEGE OF LAW | INSURANCE LAW | ATTY. SERGE CENIZA
Ruling: claims adjuster. Availment of the services of the
same agents and adjusters by different companies
1. Condition No. 3 of said insurance policies, otherwise
is a common practice in the insurance business and
known as the "Other Insurance Clause," is uniformly
such facts do not warrant the speculative
contained in all the-aforestated insurance contracts of
conclusion of the trial court.
herein petitioners.
 When the words and language of documents are
 The terms of the contract are clear and clear and plain or readily understandable by an
unambiguous. The insured is specifically ordinary reader thereof, there is absolutely no
required to disclose to the insurer any other room for interpretation or construction anymore.
insurance and its particulars which he may have The parties must abide by the terms of the contract
effected on the same subject matter. The because such terms constitute the measure of the
knowledge of such insurance by the insurer's insurer's liability and compliance therewith is a
agents, even assuming the acquisition thereof by condition precedent to the insured's right of
the former, is not the "notice" that would estop the recovery from the insurer.
insurers from denying the claim. The so-called
2. Policy Condition No. 15, reads in part:
theory of imputed knowledge (knowledge of the
"15. . . . if any false declaration be made or
agent is knowledge of the principal) does not apply
used in support thereof, . . . all benefits under
in this case.
this Policy shall be forfeited . . ."
 Thus, it points out that while petitioner Julian Sy
claimed that he had informed insurance agent
 The condition warrants and justifies the
Alvarez regarding the co-insurance on the
forfeiture of the benefits under the insurance
property, he contradicted himself by inexplicably
contract.
claiming that he had not read the terms of the
policies; that Yap Dam Chuan could not likewise
 As held in Pacific Banking Corp vs CA:
have obtained such knowledge for the same
“The unrevealed insurances makes the insured
reason, aside from the fact that the insurance with
guilty of a false declaration; a clear
Western was obtained before those of Reliance and
misrepresentation and a vital one because where
Equitable; and that the conclusion of the trial court
the insured had been asked to reveal but did not,
that Reliance and Equitable are "sister companies"
that was deception. Otherwise stated, had the
is an unfounded conjecture drawn from the mere
insurer known that there were many co-
fact that Yap Kam Chuan was an agent for both
insurances, it could have hesitated or plainly
companies which also had the same insurance
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23 DE LA SALLE UNIVERSITY – COLLEGE OF LAW | INSURANCE LAW | ATTY. SERGE CENIZA
desisted from entering into such contract. Hence,
the insured was guilty of clear fraud.

As the insurance policy against fire expressly

required that notice should be given by the
insured of other insurance upon the same
property, the total absence of such notice
nullifies the policy.”

 Petition was granted; New Life won.

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