Additional Double Insurance Cases

EMILIO GONZALES LA O vs. THE YEK TONG LIN FIRE AND MARINE INSURANCE CO
G.R. No. L-33131

December 13, 1930

Facts:
Gonzales was issued 2 fire insurance policies by Yek Tong Lin (Yek) for 100T covering his leaf
tobacco products. They were stored in Gonzales building on Soler St., which on Jan. 11, 1928,
burned down. The policies included a provision that says:
Art. 3 of the Insurance policies provided that: Any insurance in force upon all or part of the
things unsured must be declared in writing by the insured and he (insured) should cause the
company to insert or mention it in the policy. Without such requisite, such policy will be regarded
as null and void and the insured will be deprived of all rights of indemnity in case of loss.
However, Gonzales attached to the policies issued by Yek a sheet of "Other insurances" with
the amount and the assurance companies in blank.
When he sought to claim from YekTong Lin after the fire, the latter denied any liability on the
ground of violation of Art. 3 of the said policies.
Issue:
Whether or not Yek is still entitled to annul the contract.
Held:
Gonzales correctly points in his brief that Guillermo Cu Unjieng, who was then president and
majority shareholder of Yek Tong Lin Fire & Marine Insurance Co. knew that there were other
insurances, at least from the attempt to raise the insurance premium on the warehouse and the
tobacco deposited therein to 1 per centum, which was later reduced upon petition of Gonzales
and other assurance companies to 0.75 per centum presented to the association of assurance
companies in the year 1927. Notwithstanding this, Yek Tong Lin did not rescind the insurance
policies in question, but demanded and collected from the Gonzales the increased premium.
YekTong Lin had knowledge of the existence of other policies obtained by Gonzales from other
insurance companies as shown by the defendant's answer wherein it alleges, by way of special
defense, the fact that there exist other policies issued by other insurance. If, with the knowledge
of existence of other insurances which the defendant deemed violations of the contract, it has
preferred to continue the policy, its action amounts to a waiver of the annulment of the contract.

Prepared by: Harry James Sebido

2012-0522

Additional Double Insurance Cases

NEW LIFE ENTERPRISES and JULIAN SY vs. HON. COURT OF APPEALS
G.R. No. 94071 March 31, 1992
Facts:
Julian Sy and Jose Sy Bang have formed a business partnership under the business name of
New Life Enterprises engaged in the sale of construction .Julian Sy insured the stocks with
Western Guaranty Corporation, Reliance Surety and Insurance. Co., Inc., and Equitable
Insurance Corporation.
All of the policies have Condition No. 3 of said otherwise known as the "Other Insurance
Clause":
3. The insured shall give notice to the Company of any insurance or insurances already
effected, or which may subsequently be effected, covering any of the property or properties
consisting of stocks in trade, goods in process and/or inventories only hereby insured, and
unless such notice be given and the particulars of such insurance or insurances be stated
therein or endorsed on this policy pursuant to Section 50 of the Insurance Code, by or on behalf
of the Company before the occurrence of any loss or damage, all benefits under this policy shall
be deemed forfeited, provided however, that this condition shall not apply when the total
insurance or insurances in force at the time of loss or damage not more than P200,000.00.
Petitioner
failed
to
inform
the
other
insurance
corporations
because
insurance agent Leon Alvarez (for Western) and Yap KamChuan (for Reliance and Equitable)
knew about the existence of the additional insurance coverage and that they were not
informed about the requirement that such other or additional insurance should be stated in the
policy, as they have not even read policies.
The building occupied by the New Life Enterprises was gutted by fire and the stocks in the trade
inside said building that were insured.
All of the Insurance companies denied the clain on the ground of breach of policy.
Issue:
Whether or not Condition Nos. 3 the insurance contracts were violated by petitioners resulting in
their forfeiture of all the benefits.
Held:
Yes. The terms of the contracts are clear and unambiguous.The insured is specifically required
to disclose to the insurer any other insurance and its particulars which he may have effected on
the same subject matter. The knowledge of such insurance by the insurer's agents, even
assuming the acquisition thereof by the former, is not the "notice" that would estopped the
insurers from denying the claim. The so-called theory of imputed knowledge, that is, knowledge
of the agent is knowledge of the principal, aside from being of dubious applicabilityhere has
been refuted by respondent court (CA) whose factual findings are acceptable. The words and
language of documents are clear, plain and readily understandable by an ordinary reader that
there is absolutely no room for interpretation or construction anymore.
Prepared by: Harry James Sebido
2012-0522