LUIS DEL CASTILLO, IN HIS CAPACITY AS ADMINISTRATOR OF INTESTATE ESTATE OF THE DECEASED ANDRES GRIMALT Y PASTOR, PLAINTIFF AND APPELLANT, VS. METROPOLITAN INSURANCE COMPANY, DEF…

This is an appeal taken from a decision of the Court of First Instance of
Manila absolving the defendant Metropolitan Insurance Company from the complaint
filed by Luis del Castillo as administrator of the estate of the deceased Andres
Grimalt y Pastor.

According to the stipulation of facts submitted by the parties, the deceased
Andres Grimalt y Pastor, was the owner of “Panaderia la Magdalena” situated
between O’Donnel and Misericordia streets in the city of Manila which was
insured against fire and lightning and covered by Policies nos. 21489, 21105 and
21106 issued by the Metropolitan Insurance Company which were in full force and
effect at the time said property was partially destroyed by fire. Said Policies
have their face value of p15,000.00, P30,000.00, and P40,000.00 respectively and
were worded identically there having been paid by the insured to the defendant
company as premiums the amounts of P300 for Policy No. 21489, P600 for Policy
No. 21105 and P800 for Policy No. 21106 for the period comprised between
September 23, 1941, and September 23, 1942.

Paragraph six (6) of each of these Policies is as follows:

“This insurance does not cover any loss or damage which either in origin or
extent is directly or indirectly, proximately or remotely, occasioned by or
contributed to by any of the following occurrences, or which, either in origin
or extent directly or indirectly, proximately or remotely, arises out of or in
connection with any of such occurrences, namely:

“(1) Earthquake, volcanic eruption, typhoon, hurricane, tornado, cyclone, or
other convulsion of nature or atmospheric disturbance.

“(2) War, invasion, act of foreign enemy, hostilities or warlike operations
(whether war be declared or not), mutiny, riot, civil commotion, insurrection,
rebellion, revolution, conspiracy, military naval or usurped power, martial law
or state of siege, or any of the events or causes which determine the
proclamation or maintenance of martial law or state of siege.

“Any loss or damage happening during the existence of abnormal conditions
(whether physical or otherwise), directly or indirectly, proximately or
remotely, occasioned by or contributed to by or arising out of or in connection
with any of the said occurrences shall be deemed to be loss or damage which is
not covered by this insurance, except to the extent that the Insured shall prove
that such loss or damage happened independently of the existence of such
abnormal conditions.

“In any action, suit or other proceeding, where the Company alleges that by
reason of the provisions of this condition any loss or damage is not covered by
this insurance, the burden of proving that such loss or damage is covered shall
be upon the Insured.”

Early in the afternoon of January 2, 1942, a fire broke out in a grocery
store owned by Yu Dian Chiang, then being looted, and caught and destroyed two
doors of the “Panaderia la Magdalena” building, thus causing a damage in the
amount of P62,000.

The main issue here is whether or not the defendant, Metropolitan Insurance
Company, is liable for the damage thus caused to the bakery above mentioned.

As above indicated, one of the conditions stipulated in the Policies is that
any loss or damage caused by war or invasion or “any loss or damage happening
during the existence of abnormal conditions (whether physical or otherwise)
directly or indirectly, proximately or remotely, occasioned by or contributed to
by or arising out of or in connection with any of the said occurrences shall be
deemed to be loss or damage which is not covered by this insurance” and that
“where the Company alleges that by reason of the provisions of this condition
any loss or damage is not covered by this insurance, the burden of proving that
such loss or damage is covered shall be upon the Insured”.

Insurance companies, generally, are willing to assume only ordinary risks or
losses that may happen under ordinary conditions or in times of peace. Insurance
companies are entitled to protect themselves and maintain their stability in the
interest of the people whom they insure and accordingly they should avoid
assuming extra-ordinary risks due to unusual and peculiarly destructive causes
which are disproportionate to the amount of premium paid. It is for this reason
that extraordinary causes of loss for which no augmented premium has been paid
are excluded from the coverage of the Policies issued by the defendant company.
(See Aetna Ins. Co. vs. Boom 95 U.S. 117; 24 Law. Ed. 395,
398; cited with approval in Woogmaster vs. Liverpool & London Globe
Ins. Co., 45 N. E. [2d], 394, 396; Am. Mfg. Corp. vs. Nat. Union Fire
Insurance Co., 14 So. [2d], 430, 438; Holmes vs. Employer’s Liability
Ass. Corp. Ltd. of London, Eng., 43 N. E. [2d] 746, 753).

On January 2, 1942, when the bakery owned by plaintiff was destroyed
partially by fire, the conditions in Manila were entirely abnormal on account of
the war. In the stipulation of facts submitted by the parties, It is stated that
in the city of Manila from December 29, 1941 up to January 3, 1942, due
undoubtedly to the evacuation of the Philippine and U.S. Army and to the
imminence of Japanese invasion, the conditions of peace and order were totally
abnormal and beyond control for they were characterized by panic and confusion
and accompanied by unchecked looting, uncontrolled mobs, and outbreaks of fire.
Prom December 8, 1941 to January 4, 1942 there had been at least fifty (50)
fires in Manila and on January 2, 1942 there had been at least eight (8) fires
in the city. And on January 6, a fire gutted the building opposite and directly
in front of the bakery owned by plaintiff. Since 2/3 of the population and 2/3
of the police force of the city had evacuated to the provinces, many houses were
left without vigilance and were the subject of general looting, and fire, in
several instances, was the consequence. Looting and robbery were rampant in the
city because only a handful of policemen were left and they were generally
ignored by the mob of looters. Fires breaking out in houses being looted were
beyond control because a great portion of Manila’s firemen had also evacuated to
the provinces or failed to report for duty in fear of imminent danger and calls
for assistance received no response from the fire department.

The fire which destroyed partially the bakery in question, came from a
grocery that was being looted. Such fire was the effect of abnormal conditions
caused by war.

There is another reason why plaintiff’s action should be dismissed. In
paragraph thirteen (13) of the Policies it is stipulated that “if the claim is
made and rejected and an action or suit be not commenced within twelve (12)
months after such rejection * * * all benefit under this Policy shall be
forfeited.” According to the stipulation of facts, plaintiff’s claim was
rejected on February 1942, and yet the complaint in this case was filed on May
22, 1946. The action, therefore, is barred by the limitation agreed upon by the
parties.

Judgment is affirmed with costs against appellant.

Ozaeta, Pablo, Bengzon, Padilla, Tuason, Reyes, and Torres,
JJ., concur.

Montemayor, J., concurs in the result.

Moran, C.J.:

Mr. Justice Paras voted for affirmance.