G.R. No. L-10305. February 28, 1961
LEE BOG & COMPANY, PLAINTIFF AND APPELLEE, VS. THE HANOVER FIRE INSURANCE COMPANY OF THE CITY OF NEW YORK, ET AL., DEFENDANTS AND APPELLANTS. REPUBLIC OF THE PHILIPPINES, ET AL.…
BAUTISTA ANGELO, J.:
Pangasinan holding defendants-appellants liable for the face value of
the fire insurance policies issued respectively by them, with numbers
and for amounts as follows:
NumberHanover Fire Insurance Company Alliance Ins. & Surety Co. Empire Insurance Co. Phil. American Gen. Ins. Co. Commercial Union Ass. Co., Ltd. British Traders Ins. Co., Ltd. South British Ins. Co., Ltd. Insurance Co. of North Americ Century Ins. Co., Inc. People’s Surety & Ins. Co. Hanover Fire Ins. Company Total
The
assured in these policies is plaintiff-appellee Lee Bog & Company.
The insurance covered “stock of rice and palay (loose and/or sacks),
the property of the assured or held by him in trust, on commission or
on joint account, with others and/or for which he is responsible in
case of loss”, while contained during the currency of the policies in
the building of the assured in Binalonan, Pangasinan, otherwise known
as the Binalonan, Pangasinan Rice Mill. There was a common “simple loss
payable clause” in favor of the Bureau of Commerce in all the policies
issued by defendants-appellants, except Policy No. 1016373, issued by
the Hanover Fire Insurance Company, which also contained a “simple loss
payable clause” but in favor of the People’s Surety & Insurance
Co., Inc. Said clause provides that “loss, if any, under this policy,
is payable to the Bureau of Commerce, Manila, as its interest may
appear, subject to the terms, conditions, clauses, and warranties of
this policy.”
The Republic of the Philippines intervened in
behalf of the Bureau of Commerce as trustee to receive payment, in case
of loss under the first ten above-mentioned policies. Crispin A.
Fernandez and Quirino C. Martinez also intervened as alleged depositors
of the appellee for the purpose of recovering from the latter and the
appellants, jointly and severally, the value of their alleged deposits
in the aggregate sum of P8,390.00.
In this instant appeal,
it is argued that the lower court erred in considering the claims on
the bonded palay belonging to depositors separately and independently
from the claim on the unbonded palay belonging to the appellee because
the policies sued upon were concurrent and each and all of them
covered, in their entirety, inseparably and indivisibly, the stock of
rice and palay kept in the insured’s warehouse, whether belonging to
the insured or to its depositors. As there is, however, a difference
between bonded and unbonded palay and one is distinct from the other,
each subject must really be treated separately. The palay insured by
the appellee under the aforesaid ten policies included no more than
such of the palay as the warehouse received as deposits. The palay
insured by the appellee payable to the Bureau of Commerce in case of
loss covered only the palay that was received as deposits. This is the
object of the requirement of law that “every person licensed, under
this Act, to engage in the business of receiving rice for storage shall
insure the rice as received and stored against fire.” This is the very
reason why plaintiff-appellee insured said palay. The appellants cannot
pretend that they and appellee were not aware of the fact that the
subject matter of the insurance policies upon which the
intervenor-appellee is suing was solely the palay covered by the Bonded
Warehouse Act. Upon the other hand, policy No. 1016373 issued by the
Hanover Fire Insurance Company, which does not contain a clause common
to the aforementioned ten policies, referred only to the unbonded
deposits of the appellee.
Under the second assignment of
error, appellants contend that appellee has failed to establish its
loss; that the claims were for about three times the actual loss and
therefore fraudulent; that appellee employed fraudulent means and
devices to obtain undue benefits under the policies by combining and
commingling with sacks of rice and palay approximately the same
quantity of rice bran and/or rice husk; and that appellee had presented
false supporting declarations.
Appellee’s evidence of loss
(Lee Bog’s testimony, Exhibits M, M-1 to M-110, Exhibit R Column C-19,
the testimony found on pp. 147-150, 204-207, 350, 549-550, t. s. n.,
Exhibits N, N-1) has satisfactorily established the amounts claimed.
The quantity of bonded palay lost and destroyed has been proved by the
corresponding quedans (negotiable warehouse receipts), Exhibits
M, M-1 to H-110 and AQ. As shown by these receipts, the outstanding
deposits as of May 3, 1953, after deducting the withdrawals, amounted
to 659,513.5 kilos, which at 44 kilos a cavan, would be equivalent to
14,989 cavanes of palay. These figure tally with the quantity of palay
stated in the proof of loss covering the bonded palay.
As
regards the unbonded palay or that belonging to the appellee, the
amount of loss may verily be determined from the purchase of palay and
sales of milled rice that had been regularly recorded in the columnar
cash book (Exhibit R) at the place of transaction by a certified public
accountant. After simple arithmetical processes, the remaining palay at
the time of the fire would be 14,514.7 cavanes. Appellant’s argument
that fraud is manifested by the fact that the quantity of palay is
still short by 68.3 cavanes on the basis of 14,583 cavanes stated in
the proof of loss involves an insignificant error if due consideration
is taken of the circumstance that it does not exactly and necessarily
take two cavanes of palay to mill a cavan of rice. The type of palay
and the dryness of husks affect the process.
Moreover, the
testimony of the managing partner of the appellee company and of
Agustin de Vera and Segismundo Millan, both commercial agents of the
Bureau of Commerce at the time assigned in Pangasinan, confirms the
physical existence of the claimed quantity of palay, as their estimates
more or less approximate the actual loss. Naturally, numerical
precision may not be expected, because those estimates were based
merely on a physical observation of the big pile existing before the
fire. It is sufficient that they show little discrepancy with the
figures recorded in the books of the appellee.
The
mathematical computations of witnesses Filomeno and Magpili are “rough
estimates” and therefore some allowance for such technical factors as
“staggering,” “shrinkage” and “angle of repose” should be duly taken
into account; and where said estimates do not show too wide a
difference, there would be no justification in discrediting appellee’s
claims.
We also overrule the contention that the appellee
used fraudulent means or devices to obtain benefits under the policies.
The conclusion that, because the samples of the debris taken from the
warehouse after the fire consisted of darak and rice husks,
these must have been contained in the sacks stored in the warehouse, is
untenable. In the first place, it is not unusual to find such debris
because their unburned material formed the protective lining of the
sacks of palay. Secondly, the samples were taken only from the sides of
the pile and not from its core. Thirdly, considering (as appellee
argues) the size of the pile, 1,411.84 cubic meters, and the time it
took the fire to consume the mass of palay, the samples taken are too
insignificant to be representative. Lastly, the motive for such alleged
fraud is missing. Appellee company was having a thriving business at
the time of the fire.
In the light of the foregoing
considerations, the decision appealed from is hereby affirmed with
costs against appellants. So ordered.
Bengzon, Acting C.J., Padilla, Concepcion, Reyes, J.B.L., Barrera, Paredes, and Dizon, JJ., concur.