Scribd
Upload
61 views4 pages

G.R. No.: 76399, 75605 Jan. 22, 1993 and Romero, JJ: Topic (Per Syllabus/book)

1) Rafael Verendia had a fire insurance policy on his residential building with Fidelity and Surety Insurance Company, with Monte de Piedad & Savings Bank as the beneficiary. He also insured the building with two other companies. 2) The building was completely destroyed by fire. When Verendia filed a claim, Fidelity refused payment, arguing that the policy was void due to over-insurance and fraudulent misrepresentation of the lease. 3) The issue was whether Verendia forfeited benefits under the policy by presenting a fraudulent lease contract that was signed by "Roberto Garcia" instead of the actual lessee "Marcelo Garcia". The Supreme Court ultimately ruled in favor of

Uploaded by

Leizandra Pugong
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
61 views4 pages

G.R. No.: 76399, 75605 Jan. 22, 1993 and Romero, JJ: Topic (Per Syllabus/book)

1) Rafael Verendia had a fire insurance policy on his residential building with Fidelity and Surety Insurance Company, with Monte de Piedad & Savings Bank as the beneficiary. He also insured the building with two other companies. 2) The building was completely destroyed by fire. When Verendia filed a claim, Fidelity refused payment, arguing that the policy was void due to over-insurance and fraudulent misrepresentation of the lease. 3) The issue was whether Verendia forfeited benefits under the policy by presenting a fraudulent lease contract that was signed by "Roberto Garcia" instead of the actual lessee "Marcelo Garcia". The Supreme Court ultimately ruled in favor of

Uploaded by

Leizandra Pugong
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 4

Verendia v.

Court of Appeals

G.R. No.: 76399, Jan. 22, 1993 Gutierrez, Jr., Bidin, Davide, Jr.
75605 and Romero, JJ|||
)
TOPIC uberrimae fides contract
(per syllabus/book)
TICKLER
(as in the case)

RECIT READY – SUMMARY (OPTIONAL)


Petitioner Rafael Verendia's residential building was insured with Fidelity and
Surety Insurance Company and two others, Country Bankers Insurance
and Development Insurance, with Monte de Piedad & Savings Bank as
beneficiary. The insured building was completely destroyed by fire. With this,
petitioner claim for the insurance on which Fidelity refused to give. Fidelity, among
other things, averred that the policy was avoided by reason of over-insurance,
that Verendia maliciously represented that the building at the time of the fire was
leased under a contract executed to a certain Roberto Garcia, when actually it
was a Marcelo Garcia who was the lessee. The issue is whether Verendia forfeited
all benefits under the fire insurance policy due to his presentation of a fraudulent
lease contract (signed by Roberto Garcia when in fact, it was Marcelo Garcia
who signed it) to support his claim. The court held YES. Since Verendia used a false
lease contract to support his claim under the fire insurance policy, the terms of
the policy should be strictly construed against him. Verendia failed to live by the
terms of the policy, specifically Section 13 thereof which is expressed in terms that
are clear and unambiguous, that all benefits under the policy shall be forfeited "if
the claim be in any respect fraudulent, or if any false declaration be made or
used in support thereof, or if any fraudulent means or devises are used by the
insured or anyone acting in his behalf to obtain any benefit under the policy". As
such, Verendia, having presented a false declaration to support his claim for
benefits in the form of a fraudulent lease contract, he forfeited all benefits therein
by virtue of Section 13 of the policy in the absence of proof that Fidelity waived
such provision. Worse yet, by presenting a false lease contract, Verendia
reprehensibly disregarded the principle that insurance contracts are uberrimae
fidae and demand the most abundant good faith.

FACTS:
 Fidelity and Surety Insurance Company of the Philippines (“Fidelity”) issued a
Fire Insurance Policy covering Rafael (Rex) Verendia's residential building.
Designated as beneficiary was the Monte de Piedad & Savings Bank. Verendia
also insured the same building with two other companies, namely, The Country
Bankers Insurance and The Development Insurance.
 While the three fire insurance policies were in force, the insured property was
completely destroyed by fire. Fidelity was accordingly informed of the loss and
despite demands, refused payment under its policy, thus prompting Verendia
to file a complaint with the then Court of First Instance of Quezon City, praying
for payment of P385,000.00, legal interest thereon, plus attorney's fees, and
litigation expenses. The complaint was later amended to include Monte de
Piedad as an unwilling defendant.
 Fidelity averred that the policy was avoided by reason of over-insurance, that
Verendia maliciously represented that the building at the time of the fire was
leased under a contract to a certain Roberto Garcia, when actually it was a
Marcelo Garcia who was the lessee.

RTC rendered a decision in favor of Fidelity. It ruled that Paragraph 3 of the


policy was also violated by Verendia in that the insured failed to inform
Fidelity of his other insurance coverages with Country Bankers Insurance
and Development Insurance.
CA reversed the trial court’s decision for the following reasons: (a) there was
no misrepresentation concerning the lease for the contract was signed
by Marcelo Garcia in the name of Roberto Garcia; and (b) Paragraph 3
of the policy contract requiring Verendia to give notice to Fidelity of other
contracts of insurance was waived by Fidelity as shown by its conduct in
attempting to settle the claim of Verendia.

Petitioner Respondent
(a) there was no misrepresentation The policy was avoided by reason of
concerning the lease for the contract over-insurance, that Verendia
was signed by Marcelo Garcia in the maliciously represented that the
name of Roberto Garcia; and (b) building at the time of the fire was
Paragraph 3 of the policy contract leased under a contract executed to
requiring Verendia to give notice to a certain Roberto Garcia, when
Fidelity of other contracts of insurance actually it was a Marcelo Garcia who
was waived by Fidelity as shown by its was the lessee.
conduct in attempting to settle the
claim of Verendia.

ISSUE: Whether Verendia forfeited all benefits under the fire insurance policy due
to his presentation of a fraudulent lease contract (signed by Roberto Garcia
when in fact, it was Marcelo Garcia who signed it) to support his claim.
RULING: YES. Since Verendia used a false lease contract to support his claim under
the fire insurance policy, the terms of the policy should be strictly construed
against him. Verendia failed to live by the terms of the policy, specifically Section
13 thereof which is expressed in terms that are clear and unambiguous, that all
benefits under the policy shall be forfeited "if the claim be in any respect
fraudulent, or if any false declaration be made or used in support thereof, or if
any fraudulent means or devises are used by the insured or anyone acting in his
behalf to obtain any benefit under the policy". As such, Verendia, having
presented a false declaration to support his claim for benefits in the form of a
fraudulent lease contract, he forfeited all benefits therein by virtue of Section 13
of the policy in the absence of proof that Fidelity waived such provision. Worse
yet, by presenting a false lease contract, Verendia reprehensibly disregarded the
principle that insurance contracts are uberrimae fidae and demand the most
abundant good faith.

Basically a contract of indemnity, an insurance contract is the law between the


parties. Its terms and conditions constitute the measure of the insurer's liability and
compliance therewith is a condition precedent to the insured's right to recovery
from the insurer. As it is also a contract of adhesion, an insurance contract should
be liberally construed in favor of the insured and strictly against the insurer
company which usually prepares it.

SC DOCTRINE
Considering that Verendia used a false Basically a contract of indemnity, an
lease contract to support his claim insurance contract is the law between
under the Fire Insurance Policy, the the parties. Its terms and conditions
terms of the policy should be strictly constitute the measure of the insurer's
construed against the insured. liability and compliance therewith is a
Verendia failed to live by the terms of condition precedent to the insured's
the policy, specifically Section 13 right to recovery from the insurer. As it
thereof which is expressed in terms that is also a contract of adhesion, an
are clear and unambiguous, that all insurance contract should be liberally
benefits under the policy shall be construed in favor of the insured and
forfeited "if the claim be in any respect strictly against the insurer company
fraudulent, or if any false declaration which usually prepares it.
be made or used in support thereof, or
if any fraudulent means or devises are A contract of adhesion is one
used by the Insured or anyone acting wherein a party, usually a
in his behalf to obtain any benefit corporation, prepares the
under the policy". Verendia, having stipulations in the contract, while
presented a false declaration to
support his claim for benefits in the
form of a fraudulent lease contract, he the other party merely affixes his
forfeited all benefits therein by virtue of signature or his "adhesion" thereto.
Section 13 of the policy in the absence
of proof that Fidelity waived such
provision (Pacific Banking Corporation
vs. Court of Appeals, supra). Worse yet,
by presenting a false lease contract,
Verendia reprehensibly disregarded
the principle that insurance contracts
are uberrimae fidae and demand the
most abundant good faith.

FINAL DISPOSITION: WHEREFORE, the petition in G.R. No. 75605 is DISMISSED. The
petition in G.R. No. 76399 is GRANTED and the decision of the then Intermediate
Appellate Court under review is REVERSED and SET ASIDE and that of the trial court
is hereby REINSTATED and UPHELD.

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy