EAST FURNITURE INC. vs. GLOBE & RUTGERS FIRE INSURANCE CO.
OF NEW YORK
FACTS:
On March 2, 1929, a fire broke out in plaintiff's establishment,
as a result of which the insured articles therein found were
destroyed by the fire, within the period marked in the policies the
plaintiff presented to the insurance companies an inventory of the
insured furniture which was destroyed by the fire, the value of
which, before or at the time of the fire, amounted to P52,061.99.
Three actions were instituted in the Court of First Instance of
Manila on March 25, 1929, to recover the full amount of three fire
insurance police aggregating P20,000.
The defendants interposed a general denial and as special
defenses alleged in substance (1) that the fire in question was of
intentional origin; and (2) that the claims of loss presented by
the plaintiff were false and fraudulent. After the trial, the lower
court found that the claims presented by the plaintiff were
notoriously fraudulent, and, accordingly, sustained defendant's
second special defense and dismissed the complaint in each of the
three cases, with costs against the plaintiff.
ISSUE:Should the special defense of non-recovery on the policy
due to wilful acts of the insured be sustained?
HELD:Yes. It appears from the record that at the time of the
fire the plaintiff was heavily indebted to the Manila Finance &
Discount Corporation, to the Bank of the Philippine Islands, and to
Attorney Alfonso E. Mendoza. This thus led to the conclusion that
defendants' first special defense is well founded that the fire in
question was of intentional origin and was caused with the
connivance of the plaintiff. Neither the interest of the justice
nor public policy would be promoted by an omission of the courts to
expose and condemn incendiarism once the same is established by
competent evidence. It would tend to encourage rather than suppress
that great public menace if the courts do not expose the crime to
public condemnation when the evidence in a case like the present
shows that it has really been committed.
Condition 12 of each of the insurance policies sued upon
provides that "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 devices are used by the Insured or anyone
acting on his behalf to obtain any benefit under this policy; or,
if the loss or damage be occasioned by the wilful act, or with the
connivance of the Insured, all benefit under this policy shall be
forfeited."
