La O v. Yek Tong Lin Fire & Marine Insurance Co.
REITERATIONFacts
The Antecedents: Plaintiff Emilio Gonzales La O filed an action to recover P100,000 from the defendant, Yek Tong Lin Fire & Marine Insurance Co., Ltd., representing the value of leaf tobacco insured by the plaintiff, which was damaged by a fire that destroyed the warehouse where it was stored on January 11, 1928. The plaintiff had also filed similar claims against other insurance companies for a total of P290,000. Procedural History: The trial court rendered judgment ordering the defendant to pay the plaintiff P100,000 plus legal interest and costs. The defendant appealed this decision. The Appeal: The defendant appealed, alleging that the trial court erred in referring to a settlement reached with other insurance companies, in declaring that the sole issue was the value of the tobacco, in not finding the policy void due to lack of written notice of other insurances, in its findings regarding the quantity of tobacco, and in its computation of damages based on cost price instead of market price.
Issue(s)
Whether the trial court erred in referring to the settlement with other insurance companies. Whether the trial court erred in limiting the issue to the value of the tobacco. Whether the plaintiff could recover under the policy despite not proving that the Bank of the Philippine Islands, to whom the policy was made payable, no longer had any interest in it. Whether the plaintiff violated Article 3 of the policy conditions by failing to notify the defendant in writing of other insurance policies, thus rendering the policy null and void. Whether the trial court erred in its findings regarding the quantity of tobacco in the warehouse at the time of the fire. Whether the trial court erred in computing damages based on the cost price of the tobacco instead of its market price.
Ruling
The Supreme Court affirmed the judgment of the trial court. The defendant was ordered to pay the plaintiff P100,000, with legal interest from June 27, 1928, plus costs.
Ratio Decidendi
On Whether the trial court erred in referring to the settlement with other insurance companies: The Court found no merit in this assignment of error. Since the three other cases involving the same plaintiff and different insurance companies were jointly tried with the instant case, and the settlement was reached after the plaintiff presented his evidence, it was valid for the trial court to refer to it in its decision. The court's reference did not constitute a reversible error. On Whether the trial court erred in limiting the issue to the value of the tobacco: The Court found no error. The defendant's answer admitted that the plaintiff insured his leaf tobacco with the defendant and that the goods were damaged by fire. The primary dispute, therefore, revolved around the quantity and value of the tobacco destroyed, especially in light of the defendant's special defenses concerning warranties. On Whether the plaintiff could recover under the policy despite not proving that the Bank of the Philippine Islands no longer had any interest: The Court held that the plaintiff could recover. The defendant did not allege defect of parties plaintiff in its answer. Furthermore, the policies merely stated that the bank would be paid an indemnity according to its interest, not that the plaintiff ceded all his rights. The presentation of the mortgaged policies by the plaintiff gave rise to the presumption that the secured debt had been paid, in accordance with Article 1191 of the Civil Code. The Court cited Corpus Juris, stating that the insured is the proper party to sue, even if the policy is for the benefit of another or payable to another as his interest may appear, and even if a judgment obtained is assigned as collateral. On Whether the plaintiff violated Article 3 of the policy conditions by failing to notify the defendant of other insurances: The Court ruled that the plaintiff did not violate the condition. While Article 3 required written notification of other insurances, the policies contained a typewritten clause stating "Subject to clauses G and A and other insurances with a special short period attached to this policy." Attached to these policies was a sheet for "Other insurances" with blanks, which the appellee argued constituted notification. More importantly, the appellant raised this violation for the first time on appeal, failing to do so in its answer. Furthermore, the president of the appellant company knew of other insurances, as evidenced by attempts to increase premiums. This knowledge, coupled with the continued collection of premiums, constituted a waiver of the right to annul the contract, as per the doctrine in 19 Cyc., 791, 792. On Whether the trial court erred in its findings regarding the quantity of tobacco: The Court found no error. The assignments of error concerning the quantity of tobacco involved purely questions of fact. After reviewing the evidence presented, the Court was convinced that the trial court's findings were well-supported and that no fact was overlooked that would have changed the result. The court found that the plaintiff had more than 6,200 bales of leaf tobacco worth over P300,000. On Whether the trial court erred in computing damages based on cost price instead of market price: The Court held this error was not well-taken. The cost price is competent evidence tending to show the value of the article. Citing Glaser vs. Home Ins. Co., the Court stated that the cost of goods destroyed is some evidence of value. Exhibits showing invoices and the testimony of a public accountant indicated a cost price of P51.8544 per bale, totaling over P320,000 for 6,264 bales. The adjusters themselves, using information from Tabacalera and M. Pujalte, S. en C., concluded the value was not less than P290,000 and appraised the tobacco at P303,052.32.
Main Doctrine
The Supreme Court affirmed the trial court's decision, holding that the plaintiff sufficiently proved the value of the insured tobacco through various documentary and testimonial evidence, including official registers, stock books, invoices, and expert testimony. The Court also ruled that the defendant insurance company waived its right to declare the policy void due to alleged violations of warranty regarding other insurances, as it had knowledge of these other policies and continued to collect premiums. The cost price of the destroyed goods was deemed competent evidence of their value.