TAI TONG CHUACHE & CO v.

INSURANCE COMMISSION and TRAVELLERSMULTI-

INDEMNITY CORPORATION
February 29, 1988

FACTS
- Complainants Palomo acquired a parcel of land and a building located in Davao City.They assumed the
mortgage of the building in favor of SSS, which building was insuredwith respondent SSS Accredited Group of
Insurers for P25K

.- On April 19, 1975, Azucena Palomo obtained a P100K loan from Tai Tong ChuacheInc. (TTCC) and executed
a mortgage over the land and the building in favor of TaiTong Chuache & Co. as security of payment. On April
25, 1975, Arsenio Chua,representative of TTCC insured the latter's interest with Travellers Multi-
IndemnityCorporation (Travellers) for P100K (P70K for bldg and P30K for the contents thereof)

- On June 11, 1975, Pedro Palomo secured a Fire Insurance Policy, covering thebuilding for P50K with
respondent Zenith Insurance Corporation (ZIC). Another FireInsurance Policy was later procured from
respondent Philippine British AssuranceCompany (PBAC), covering the same building for P50K and contents
thereof for P70K.On July 31, 1975, the building and the contents were totally razed by fire.

- Based on the computation of the loss, including the Travellers, respondents, ZIC,PBAC, and SSS paid their
corresponding shares of the loss. Complainants were paidthe following: P41,546.79 by PBAC, P11,877.14 by
ZIC, and P5,936.57 by SSS.Demand was made from respondent Travellers for its share in the loss but was
refused.Hence, complainants demanded from the other 3 respondents the balance of eachshare in the loss
based on the computation excluding Travellers Multi-Indemnity in theamount of P30,894.31 (P5,732.79-ZIC:
P22,294.62, PBAC: and P2,866.90, SSS) butwas refused, hence, this action.

ISSUE:
WON petitioner Tai Tong has insurable interest in the said policy. YES.

RATO:

- First, respondent insurance commission based its findings on mere inference.Respondent Insurance
Commission absolved respondent insurance company fromliability on the basis of the certification issued by the
then CFI, that in a certain civilaction against the Palomos, Arsenio Lopez Chua stands as the complainant and
not TaiTong Chuache. From said evidence respondent commission inferred that the creditextended by herein
petitioner to the Palomos secured by the insured property musthave been paid. Such is a glaring error which this
Court cannot sanction.- Second, it has been held in a long line of cases that when the creditor is in possessionof
the document of credit, he need not prove non-payment for it is presumed. Thevalidity of the insurance policy
taken by petitioner was not assailed by privaterespondent. Moreover, petitioner's claim that the loan extended to
the Palomos has notyet been paid was corroborated by Azucena Palomo who testified that they are still indebted
to herein petitioner. So at the time of the fire, petitioner as mortgagee still hadinsurable interest therein.- And third,
petitioner's declaration that Arsenio Lopez Chua acts as the managingpartner of the partnership was
corroborated by respondent insurance company. ThusChua as the managing partner of the partnership may
execute all acts of administration including the right to sue debtors of the partnership in case of their failure to pay
their obligations when it became due and demandable. Or at the least, Chua being a partner of petitioner Tai
Tong Chuache & Company is an agent of the partnership. Being anagent, it is understood that he acted for and
in behalf of the firm.

Disposition:
Appealed decision SET ASIDE and ANOTHER judgment is renderedorder private respondent
Travellers to pay petitioner the face value of Fire Insurance Policy in the amount of P100K. Costs against said
private respondent.