G.R. No. 35848 , 35849, 35850. November 22, 1932.
THE EAST FURNITURE INC., plaintiff-appellant, vs. THE GLOBE & RUTGERS FIRE INSURANCE CO. OF NEW YORK, et al., defendants-appellees.

FACTS

The East Furniture Inc. filed three separate actions to recover the total sum of P20,000 from three fire insurance companies after its furniture store was destroyed by fire on March 2, 1929. The insurance companies denied liability, alleging as special defenses that the fire was of intentional (incendiary) origin, that the plaintiff’s claim of loss was false and fraudulent, that the plaintiff had mortgaged the furniture without disclosing this interest, and that the plaintiff violated a policy condition by refusing to furnish a physical inventory. The trial court consolidated the cases and dismissed the complaints, finding the plaintiff’s claims “notoriously fraudulent.” The plaintiff appealed.

ISSUE

Whether the insurance companies are liable under the fire insurance policies, considering the defenses of intentional fire and fraudulent claim.

RULING

No. The Supreme Court affirmed the trial court’s dismissal of the complaints. The Court found the evidence sufficient to establish that the fire was of intentional origin, set for the purpose of collecting the insurance. The Court noted the discovery of gasoline and kapok saturated with gasoline at the fire’s origin, the plaintiff manager’s inadequate explanations, and credible testimony that the manager had previously expressed an intent to burn the store due to financial distress. Furthermore, the Court found the plaintiff’s claim of loss (P52,061.99) to be grossly exaggerated and fraudulent, especially in light of evidence showing the actual value of the salvaged furniture was minimal and the plaintiff’s financial motive. The fraudulent claim alone constituted a violation of the policy conditions and barred recovery. The defenses of mortgage and refusal to furnish inventory were deemed unnecessary to resolve.

AI Generated by Armztrong.