Verendia v. Court of Appeals
REITERATIONFacts
The Antecedents: Fidelity and Surety Insurance Company of the Philippines (Fidelity) issued a fire insurance policy to Rafael (Rex) Verendia covering his residential building. Verendia also insured the same building with two other companies. The insured property was completely destroyed by fire. Fidelity refused payment, citing over-insurance and misrepresentation regarding the lease contract. The trial court ruled in favor of Fidelity, finding violations of the policy regarding other insurance coverages and the lease contract. The appellate court reversed, finding no misrepresentation in the lease and that Fidelity waived the notice requirement for other insurance policies. Procedural History: Verendia filed a complaint for payment of the insurance proceeds. The trial court ruled in favor of Fidelity. Verendia appealed to the Intermediate Appellate Court (IAC), which reversed the trial court's decision. Fidelity filed a motion for extension to file a motion for reconsideration, which was granted, and subsequently filed its motion for reconsideration. Verendia moved to expunge Fidelity's motion for reconsideration, arguing the extension was out of time. The IAC denied Verendia's motion to expunge and later denied Fidelity's motion for reconsideration. The Petition: Two consolidated petitions were filed: one by Verendia (G.R. No. 75605) seeking to uphold the IAC decision, and another by Fidelity (G.R. No. 76399) seeking to reverse the IAC decision and reinstate the trial court's ruling.
Issue(s)
Whether the filing of a motion for extension to file a motion for reconsideration suspends the reglementary period for filing said motion. Whether the lease contract presented by Verendia constituted a false declaration that would forfeit his benefits under the policy. Whether Fidelity, by submitting a subrogation receipt in evidence, agreed to settle Verendia's claim.
Ruling
The petition in G.R. No. 75605 is DISMISSED. The petition in G.R. No. 76399 is GRANTED. The decision of the Intermediate Appellate Court is REVERSED and SET ASIDE, and the decision of the trial court is REINSTATED and UPHELD.
Ratio Decidendi
On the issue of the motion for extension: The Court reiterated the doctrine that the pendency of a motion for extension of time to perfect an appeal does not suspend the running of the period sought to be extended. While the Rules of Court did not expressly prohibit motions for extension to file a motion for reconsideration, the Court's Resolution in Habaluyas Enterprises, Inc. vs. Japson declared that such motions would no longer be allowed. In this case, Fidelity's motion for extension was filed and granted before the Habaluyas resolution took effect, but the subsequent denial of Verendia's motion to expunge occurred after the Habaluyas dictum. The Court emphasized that the reglementary period for appeal or reconsideration is strict and cannot be extended without express legal basis, citing established jurisprudence on the matter. On the issue of the lease contract: The Court found that Verendia used a false lease contract to support his claim. The contract was purportedly signed by Robert Garcia, but an investigation report indicated no occupant, and Robert Garcia later executed an affidavit stating his signature was a forgery and he was not the lessee. Verendia admitted that Marcelo Garcia, not Robert, signed the contract, failing to provide a credible explanation for this ruse. This constituted a false declaration under Section 13 of the policy, which states that all benefits shall be forfeited if any false declaration is made or used in support of a claim. The Court noted that insurance contracts require the utmost good faith (uberrimae fidae). On the issue of the subrogation receipt: The Court ruled that Fidelity's submission of the subrogation receipt did not constitute an agreement to settle Verendia's claim. The receipt was unsigned by any Fidelity representative and incomplete. Crucially, Verendia himself filed a complaint for the full policy amount, contradicting the notion that he had already received a settlement amount as indicated in the receipt. Therefore, interpreting the presentation of the receipt as an accession to its terms lacked a rational basis and would be substituting the Court's will for that of the parties.
Main Doctrine
A false declaration or fraudulent means used by the insured to support a claim under a fire insurance policy, specifically the presentation of a forged lease contract, results in the forfeiture of all benefits under the policy, absent any waiver by the insurer. The filing of a motion for extension to file a motion for reconsideration, if not expressly allowed, does not suspend the reglementary period for appeal or reconsideration.