RIZAL
SURETY & INSURANCE COMPANY V CA
(TRANSWORLD
KNITTING MILLS, INC.)
336
SCRA 12; PURISIMA; July 18, 2000
NATURE
Petition
for Review on Certiorari under Rule 45 of the Rules of Court
FACTS
-
Rizal Surety & Insurance Company (Rizal Insurance) issued Fire Insurance
Policy No. 45727 in favor of Transworld Knitting Mills, Inc. (Transworld).
-
Pertinent portions of subject policy on the buildings insured, and location
thereof, read: "‘On stocks of finished and/or unfinished products, raw
materials and supplies of every kind and description, the properties of the
Insureds and/or held by them in trust, on commission or on joint account with
others and/or for which they (sic) responsible in case of loss whilst contained
and/or stored during the currency of this Policy in the premises
occupied
by them forming part of the buildings situate (sic) within own Compound at
MAGDALO STREET, BARRIO UGONG, PASIG, METRO MANILA, PHILIPPINES, BLOCK NO.601.’
x
xx............ ...xxx....... ........xxx
‘Said
building of four-span lofty one storey in height with mezzanine portions is
constructed of reinforced concrete and hollow blocks and/or concrete under
galvanized iron roof and occupied as hosiery mills, garment and
lingerie
factory, transistor-stereo assembly plant, offices, warehouse and caretaker's
quarters.
'Bounds
in front partly by one-storey concrete building under galvanized iron roof
occupied as canteen and guardhouse, partly by building of two and partly one
storey constructed of concrete below, timber above undergalvanized iron roof
occupied as garage and quarters and partly by open space and/or tracking/
packing, beyond which is the aforementioned Magdalo Street; on its right and
left by driveway, thence open spaces, and at the rear by open spaces.'"
-
The same pieces of property insured with the petitioner were also insured with
New India Assurance Company, Ltd., (New India).
-
Fire broke out in the compound of Transworld, razing the middle portion of its
four-span building and partly gutting the left and right sections thereof. A
two-storey building (behind said fourspan building) where fun and amusement
machines and spare parts were stored, was also destroyed by the fire.
-
Transworld filed its insurance claims with Rizal Surety & Insurance Company
and New India Assurance Company but to no avail.
-
Private respondent brought against the said insurance companies an action for
collection of sum of money and damages.
-
Petitioner Rizal Insurance countered that its fire insurance policy sued upon
covered only the contents of the four-span building, which was partly burned,
and not the damage caused by the fire on the two-storey annex building.
-
The trial court dismissed the case as against The New India Assurance Co., Ltd.
but ordered defendant Rizal Surety And Insurance Company to pay Transwrold
(sic) Knitting Mills, Inc.
-
Both the petitioner, Rizal Insurance Company, and private respondent,
Transworld Knitting Mills, Inc., went to the Court of Appeals, which required
New India Assurance Company to pay plaintiff appellant the amount of
P1,818,604.19 while the Rizal Surety has to pay the plaintiff-appellant P470,328.67.
-
New India appealed to the Court theorizing inter alia that the private
respondent could not be compensated for the loss of the fun and amusement
machines and spare parts stored at the two-storey building because it (Transworld)
had no insurable interest in said goods or items.
-
The Court denied the appeal with finality.
-
Petitioner Rizal Insurance and private respondent Transworld, interposed a
Motion for Reconsideration before the Court of Appeals, which reconsidered its
decision of July 15, 1993, as regards the imposition of interest.
-
Undaunted, petitioner Rizal Surety & Insurance Company found its way to the
Court.
ISSUE
WON
the fire insurance policy litigated upon protected only the contents of the
main building (four-span), and did not include those stored in the two-storey
annex building
HELD
NO
-
Resolution of the issue posited hinges on the proper interpretation of the
stipulation in subject fire insurance policy regarding its coverage, which reads:
"xxx
contained and/or stored during the currency of this Policy in the premises
occupied by them forming part of the buildings situate (sic) within own Compound
xxx"
-
It can be gleaned unerringly that the fire insurance policy in question did not
limit its coverage to what
were
stored in the four-span building. As opined by the trial court of origin, two
requirements must
concur
in order that the said fun and amusement machines and spare parts would be
deemed
protected
by the fire insurance policy under scrutiny, to wit:
"First,
said properties must be contained and/or stored in the areas occupied by
Transworld and second, said areas must form part of the building described in
the policy xxx"
-
Said building of four-span lofty one storey in height with mezzanine portions
is constructed of reinforced concrete and hollow blocks and/or concrete under
galvanized iron roof and occupied as hosiery mills, garment and lingerie
factory, transistor-stereo assembly plant, offices, ware house and caretaker's quarter.
-
The Court is mindful of the well-entrenched doctrine that factual findings by
the Court of Appeals are conclusive on the parties and not reviewable by this
Court, and the same carry even more weight when the Court of Appeals has
affirmed the findings of fact arrived at by the lower court.
-
In the case under consideration, both the trial court and the Court of Appeals
found that the so called "annex " was not an annex building but an
integral and inseparable part of the four-span building described in the policy
and consequently, the machines and spare parts stored therein were covered by
the fire insurance in dispute.
-
Verily, the two-storey building involved, a permanent structure which adjoins
and intercommunicates with the "first right span of the lofty storey
building", formed part thereof, and meets the requisites for
compensability under the fire insurance policy sued upon.
-
So also, considering that the two-storey building aforementioned was already
existing when subject fire insurance policy contract was entered into,
petitioner should have specifically excluded the said two-storey building from
the coverage of the fire insurance if minded to exclude the same but if did
not, and instead, went on to provide that such fire insurance policy covers the
products, raw materials and supplies stored within the premises of respondent
Transworld which was an integral part of the four-span building occupied by
Transworld, knowing fully well the existence of such building adjoining and
intercommunicating with the right section of the four-span building.
-
Indeed, the stipulation as to the coverage of the fire insurance policy under
controversy has created a doubt regarding the portions of the building insured
thereby. Article 1377 of the New Civil Code provides:
"Art.1377.
The interpretation of obscure words or stipulations in a contract shall not
favor the party who caused the obscurity"
-
Conformably, it stands to reason that the doubt should be resolved against the
petitioner, Rizal
Surety
Insurance Company, whose lawyer or managers drafted the fire insurance policy
contract under scrutiny. Citing the aforecited provision of law in point, the
Court in Landicho vs. Government Service Insurance System, ruled:
"This
is particularly true as regards insurance policies, in respect of which it is
settled that the 'terms in an insurance policy,
which are ambiguous, equivocal, or uncertain x x x are to be construed strictly
and most strongly against the insurer, and liberally in favor of the
insured so as to effect the dominant purpose of indemnity or
payment to the insured, especially where forfeiture is involved' and the reason
for this is that the 'insured usually has no voice in the selection or
arrangement of the words employed and that the language of the contract is
selected with great care and deliberation by experts and legal advisers
employed by, and acting exclusively in the interest of, the insurance company.'
"
-
Equally relevant is the following disquisition of the Court in Fieldmen's
Insurance Company, Inc. vs. Vda. De Songco, to wit:
"'This
rigid application of the rule on ambiguities has become necessary in view of
current business practices. The courts cannot ignore that nowadays monopolies,
cartels and concentration of capital, endowed with overwhelming economic power,
manage to impose upon parties dealing with them cunningly prepared 'agreements'
that the weaker party may not change one whit, his participation in the
'agreement' being reduced to the alternative to 'take it or leave it' labeled
since Raymond Saleilles 'contracts by adherence' (contrats [sic] d'adhesion),
in contrast to these entered into by parties bargaining on an equal footing,
such contracts (of which policies of insurance and international bills of
lading are prime example) obviously call for greater strictness and vigilance
on the part of courts of justice with a view to protecting the weaker party
from abuses and imposition, and prevent their becoming traps for the
unwary.'"
-
The issue of whether or not Transworld has an insurable interest in the fun and
amusement machines and spare parts, which entitles it to be indemnified for the
loss thereof, had been settled in G.R. No. L-111118, entitled New India
Assurance Company, Ltd., vs. Court of Appeals, where the appeal of New
India from the decision of the Court of Appeals under review, was denied with
finality by this Court on February 2, 1994.
-
The rule on conclusiveness of judgment, which obtains under the premises,
precludes the relitigation of a particular fact or issue in another action
between the same parties based on a different claim or cause of action.
"xxx the judgment in the prior action operates as estoppel only as to
those matters in issue or points controverted, upon the determination of which
the finding or judgment was rendered. In fine, the previous judgment is
conclusive in the second case, only as those matters actually and directly
controverted and determined and not as to matters merely involved
therein."
Disposition
Decision, and the Resolution of the CA
WERE AFFIRMED in toto. No pronouncement as to costs.
No comments:
Post a Comment