Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-55397 February 29, 1988
T! TONG C"UC"E # CO., petitioner,
vs.
T"E !NSURNCE COMM!SS!ON a$% TR&ELLERS MULT!-!N'EMN!T(
CORPORT!ON, respondents.

GNC(CO, J.:
This petition for revie on certiorari see!s the reversal of the decision of the
Insurance "o##ission in I" "ase $%&'
1
dis#issin( the co#plaint
2
for recover)
of the alle(ed unpaid balance of the proceeds of the Fire Insurance Policies
issued b) herein respondent insurance co#pan) in favor of petitioner*intervenor.
The facts of the case as found b) respondent Insurance "o##ission are as
follos+
"o#plainants ac,uired fro# a certain Rolando -on.ales a parcel of
land and a buildin( located at San Rafael Villa(e, Davao "it).
"o#plainants assu#ed the #ort(a(e of the buildin( in favor of
S.S.S., hich buildin( as insured ith respondent S.S.S.
/ccredited -roup of Insurers for P01,222.22.
On April 19, 1975, Azucena Palomo obtained a loan from Tai Tong
Chuache Inc. in the a#ount of P322,222.22. To secure the pa)#ent
of the loan, a #ort(a(e as e4ecuted over the land and the buildin(
in favor of Tai Ton( "huache 5 "o. 6!hibit "1" and "1#A"7. On /pril
01, 38'1, /rsenio "hua, repre$entati%e of Thai Tong Chuache &
Co. insured the latter9s interest ith Travellers Multi*Inde#nit)
"orporation for P322,222.22 6P'2,222.22 for the buildin( and
P%2,222.22 for the contents thereof7 6:4hibit ;/*a,; contents thereof7
6:4hibit ;/*a;7.
On <une 33, 38'1, Pedro Palo#o secured a Fire Insurance Polic)
No. F* 20122 6:4hibit ;/;7, coverin( the buildin( for P12,222.22 ith
respondent =enith Insurance "orporation. On <ul) 3&, 38'1, another
Fire Insurance Polic) No. >?18 6:4hibit ;@;7 as procured fro#
respondent Philippine @ritish /ssurance "o#pan), coverin( the
sa#e buildin( for P12,222.22 and the contents thereof for
P'2,222.22.
On <ul) %3, 38'1, the buildin( and the contents ere totall) ra.ed b)
fire.
/dAust#ent Standard "orporation sub#itted a report as follo
444 444 444
... Thus the apportioned share of each co#pan) is as follos+
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@ased on the co#putation of the loss, includin( the Travellers Multi*
Inde#nit), respondents, =enith Insurance, Phil. @ritish /ssurance
and S.S.S. /ccredited -roup of Insurers, paid their correspondin(
shares of the loss. "o#plainants ere paid the folloin(+
P?3,1?&.'8 b) Philippine @ritish /ssurance "o., P33,>''.3? b)
=enith Insurance "orporation, and P1,8%&.1' b) S.S.S. -roup of
/ccredited Insurers 6Par. &. /#ended "o#plaint7. De#and as
#ade fro# respondent Travellers Multi*Inde#nit) for its share in the
loss but the sa#e as refused. Bence, co#plainants de#anded
fro# the other three 6%7 respondents the balance of each share in
the loss based on the co#putation of the /dAust#ent Standards
Report e4cludin( Travellers Multi*Inde#nit) in the a#ount of
P%2,>8?.%3 6P1,'%0.'8*=enith Insurance+ P00,08?.&0, Phil. @ritish+
and P0,>&&.82, SSS /ccredited7 but the sa#e as refused, hence,
this action.
In their ansers, Philippine @ritish /ssurance and =enith Insurance
"orporation ad#itted the #aterial alle(ations in the co#plaint, but
denied liabilit) on the (round that the clai# of the co#plainants had
alread) been aived, e4tin(uished or paid. @oth co#panies set up
counterclai# in the total a#ount of P 83,1?&.'8.
Instead of filin( an anser, SSS /ccredited -roup of Insurers
infor#ed the "o##ission in its letter of <ul) 00, 38'' that the herein
clai# of co#plainants for the balance had been paid in the a#ount
of P 1,8%>.1' in full, based on the /dAust#ent Standards "orporation
Report of Septe#ber 00, 38'1.
Travellers Insurance, on its part, ad#itted the issuance of the
Polic) 'o. 599 () and alle(ed as its special and affir#ative
defenses the folloin(, to it+ that Fire Polic) 'o. 599 (), coverin(
the furniture and buildin( of co#plainants as secured b) a
certain Ar$enio Chua, #ort(a(e creditor, for the purpose of
protectin( his #ort(a(e credit a(ainst the co#plainantsE that the
said polic) as issued in the na#e of /.ucena Palo#o, onl) to
indicate that she ons the insured pre#isesE that the polic) contains
an endorse#ent in favor of /rsenio "hua as his #ort(a(e interest
#a) appear to indicate that insured as /rsenio "hua and the
co#plainantsE that the pre#iu# due on said fire polic) as paid b)
/rsenio "huaE that respondent Travellers is not liable to pa)
co#plainants.
On Ma) %3, 38'', Tai Ton( "huache 5 "o. filed a co#plaint in
intervention clai#in( the proceeds of the fire Insurance Polic) No. F*
118 DV, issued b) respondent Travellers Multi*Inde#nit).
Travellers Insurance, in anser to the co#plaint in intervention, alle(ed that the
Intervenor is not entitled to inde#nit) under its Fire Insurance Polic) for lac! of insurable
interest before the loss of the insured pre#ises and that the co#plainants, spouses
Pedro and /.ucena Palo#o, had alread* paid in full their mortgage indebtedne$$ to the
inter%enor.
3
/s adverted to above respondent Insurance "o##ission dis#issed spouses
Palo#os9 co#plaint on the (round that the insurance polic) subAect of the
co#plaint as ta!en out b) Tai Ton( "huache 5 "o#pan), petitioner herein, for
its on interest onl) as #ort(a(ee of the insured propert) and thus co#plainant
as #ort(a(ors of the insured propert) have no ri(ht of action a(ainst herein
respondent. It li!eise dis#issed petitioner9s co#plaint in intervention in the
folloin( ords+
Ce #ove on the issue of liabilit) of respondent Travellers Multi*Inde#nit) to the
Intervenor*#ort(a(ee. The co#plainant testified that she as still indebted to Intervenor
in the a#ount of P322,222.22. Such alle(ation has not hoever, been sufficientl) proven
b) docu#entar) evidence. The certification 6:4hibit 9:*e97 issued b) the "ourt of First
Instance of Davao, @ranch 33, indicate that the co#plainant as /ntonio Fope. "hua
and not Tai Ton( "huache 5 "o#pan).
)
Fro# the above decision, onl) intervenor Tai Ton( "huache filed a #otion for
reconsideration but it as li!eise denied hence, the present petition.
It is the contention of the petitioner that respondent Insurance "o##ission
decided an issue not raised in the pleadin(s of the parties in that it ruled that a
certain /rsenio Fope. "hua is the one entitled to the insurance proceeds and not
Tai Ton( "huache 5 "o#pan).
This "ourt cannot fault petitioner for the above erroneous interpretation of the
decision appealed fro# considerin( the #anner it as ritten.
5
/s correctl)
pointed out b) respondent insurance co##ission in their co##ent, the decision
did not pronounce that it as /rsenio Fope. "hua ho has insurable interest
over the insured propert). Perusal of the decision reveals hoever that it readil)
absolved respondent insurance co#pan) fro# liabilit) on the basis of the
co##issioner9s conclusion that at the ti#e of the occurrence of the peril insured
a(ainst petitioner as #ort(a(ee had no #ore insurable interest over the insured
propert). It as based on the inference that the credit secured b) the #ort(a(ed
propert) as alread) paid b) the Palo#os before the said propert) as (utted
don b) fire. The fore(oin( conclusion as arrived at on the basis of the
certification issued b) the then "ourt of First Instance of Davao, @ranch II that in
a certain civil action a(ainst the Palo#os, /ntonio Fope. "hua stands as the
co#plainant and not petitioner Tai Ton( "huache 5 "o#pan).
Ce find the petition to be i#pressed ith #erit. It is a ell !non postulate that
the case of a part) is constituted b) his on affir#ative alle(ations. Gnder
Section 3, Rule 3%3
*
each part) #ust prove his on affir#ative alle(ations b) the
a#ount of evidence re,uired b) la hich in civil cases as in the present case is
preponderance of evidence. The part), hether plaintiff or defendant, ho
asserts the affir#ative of the issue has the burden of presentin( at the trial such
a#ount of evidence as re,uired b) la to obtain favorable Aud(#ent.
7
Thus,
petitioner ho is clai#in( a ri(ht over the insurance #ust prove its case.
Fi!eise, respondent insurance co#pan) to avoid liabilit) under the polic) b)
settin( up an affir#ative defense of lac! of insurable interest on the part of the
petitioner #ust prove its on affir#ative alle(ations.
It ill be recalled that respondent insurance co#pan) did not assail the validit) of
the insurance polic) ta!en out b) petitioner over the #ort(a(ed propert). Neither
did it den) that the said propert) as totall) ra.ed b) fire ithin the period
covered b) the insurance. Respondent, as #entioned earlier advanced an
affir#ative defense of lac! of insurable interest on the part of the petitioner that
before the occurrence of the peril insured a(ainst the Palo#os had alread) paid
their credit due the petitioner. Respondent havin( ad#itted the #aterial
alle(ations in the co#plaint, has the burden of proof to sho that petitioner has
no insurable interest over the insured propert) at the ti#e the contin(enc) too!
place. Gpon that point, there is a failure of proof. Respondent, it ill be noted,
e4erted no effort to present an) evidence to substantiate its clai#, hile
petitioner did. For said respondent9s failure, the decision #ust be adverse to it.
Boever, as adverted to earlier, respondent Insurance "o##ission absolved
respondent insurance co#pan) fro# liabilit) on the basis of the certification
issued b) the then "ourt of First Instance of Davao, @ranch II, that in a certain
civil action a(ainst the Palo#os, /rsenio Fope. "hua stands as the co#plainant
and not Tai Ton( "huache. Fro# said evidence respondent co##ission inferred
that the credit e4tended b) herein petitioner to the Palo#os secured b) the
insured propert) #ust have been paid. Such is a (larin( error hich this "ourt
cannot sanction. Respondent "o##ission9s findin(s are based upon a #ere
inference.
The record of the case shos that the petitioner to support its clai# for the
insurance proceeds offered as evidence the contract of #ort(a(e 6:4h. 37 hich
has not been cancelled nor released. It has been held in a lon( line of cases that
hen the creditor is in possession of the docu#ent of credit, he need not prove
non*pa)#ent for it is presu#ed.
8
The validit) of the insurance polic) ta!en b
petitioner as not assailed b) private respondent. Moreover, petitioner9s clai#
that the loan e4tended to the Palo#os has not )et been paid as corroborated
b) /.ucena Palo#o ho testified that the) are still indebted to herein petitioner.
9
Public respondent ar(ues hoever, that if the civil case reall) ste##ed fro# the
loan (ranted to /.ucena Palo#o b) petitioner the sa#e should have been
brou(ht b) Tai Ton( "huache or b) its representative in its on behalf. Fro# the
above pre#ise respondent concluded that the obli(ation secured b) the insured
propert) #ust have been paid.
The pre#ise is correct but the conclusion is ron(. "itin( Rule %, Sec.
0
1+
respondent pointed out that the action #ust be brou(ht in the na#e of the
real part) in interest. Ce a(ree. Boever, it should be borne in #ind that
petitioner bein( a partnership #a) sue and be sued in its na#e or b) its dul)
authori.ed representative. The fact that /rsenio Fope. "hua is the representative
of petitioner is not ,uestioned. Petitioner9s declaration that /rsenio Fope. "hua
acts as the #ana(in( partner of the partnership as corroborated b) respondent
insurance co#pan).
11
Thus "hua as the #ana(in( partner of the partnership
#a) e4ecute all acts of ad#inistration
12
includin( the ri(ht to sue debtors of the
partnership in case of their failure to pa) their obli(ations hen it beca#e due
and de#andable. Or at the ver) least, "hua bein( a partner of petitioner Tai Ton(
"huache 5 "o#pan) is an a(ent of the partnership. @ein( an a(ent, it is
understood that he acted for and in behalf of the fir#.
13
Public respondent9s
alle(ation that the civil case flied b) /rsenio "hua as in his capacit) as
personal creditor of spouses Palo#o has no basis.
The respondent insurance co#pan) havin( issued a polic) in favor of herein
petitioner hich polic) as of le(al force and effect at the ti#e of the fire, it is
bound b) its ter#s and conditions. Gpon its failure to prove the alle(ation of lac!
of insurable interest on the part of the petitioner, respondent insurance co#pan)
is and #ust be held liable.
IN VI:C OF TB: FOR:-OIN-, the decision appealed fro# is hereb) S:T
/SID: and /NOTB:R Aud(#ent is rendered order private respondent Travellers
Multi*Inde#nit) "orporation to pa) petitioner the face value of Insurance Polic)
No. 188*DV in the a#ount of P322,222.22. "osts a(ainst said private
respondent.
SO ORD:R:D.
Teehan+ee, C.,., 'ar%a$a, Cruz and -ri.o#A/uino, ,,., concur.

Foo,$o,e-
3 Penned b) "o##issioner -re(oria "ru.*/rnaldo
0 Filed b) Pedro Palo#o and /.ucena Palo#o.
% Pa(es %2*%?, Rollo.
? Pa(es %1*%&, Rollo.
1 See Supra.
& Revised Rules of "ourt.
' Vol. &, Moran, Revised Rules of "ourt, Pa(e ?,38>2 :d.
> Veloso vs. Veloso, > Phil. >%E Merchant vs. International @an!in(
"orporation, 8 Phil. 11?E Miller vs. <ones, 8 Phil. &?>E "hua vs.
Var(as, 33 Phil. 038E -ana va. Sheriff of Fa(una, et al., %0 Phil. 0%&.
8 Pa(es ?, &, Decision, I.". "ase No. %&'.
32 Revised Rules of "ourt.
33 Pa(e ?, Decision, 0upra. 6Respondent referred to the petitioner
and /rsenio Fope. "hua interchan(eabl)7.
30 /rt. 3>22 "ivil "ode.
3% @achrach vs. a Protectors, %' Phil. ??3, 383>.