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Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. L-55397 February 29, 1988

T! TONG C"UC"E # CO., petitioner,vs.T"E !NSURNCE COMM!SS!ON a$% TR&ELLERS MULT!-!N'EMN!T(CORPORT!ON, respondents.

GNC(CO,J.:

This petition for revie on certiorari see!s the reversal of the decision of theInsurance "o##ission in I" "ase $%&' 1dis#issin( the co#plaint 2for recover)of the alle(ed unpaid balance of the proceeds of the Fire Insurance Policiesissued b) herein respondent insurance co#pan) in favor of petitioner*intervenor.

The facts of the case as found b) respondent Insurance "o##ission are asfollos+

"o#plainants acuired fro# a certain Rolando -onales a parcel of

land and a buildin( located at San Rafael Villa(e, Davao "it)."o#plainants assu#ed the #ort(a(e of the buildin( in favor ofS.S.S., hich buildin( as insured ith respondent S.S.S.

/ccredited -roup of Insurers for P01,222.22.

On April 19, 1975, Azucena Palomo obtained a loan from Tai TongChuache Inc.in the a#ount of P322,222.22. To secure the pa)#entof the loan, a #ort(a(e as e4ecuted over the land and the buildin(in favor of Tai Ton( "huache 5 "o. 6!hibit "1" and "1#A"7. On /pril01, 38'1, /rsenio "hua, repre$entati%e of Thai Tong Chuache &

Co. insured the latter9s interest ith Travellers Multi*Inde#nit)"orporation for P322,222.22 6P'2,222.22 for the buildin( andP%2,222.22 for the contents thereof7 6:4hibit ;/*a,; contents thereof76:4hibit ;/*a;7.

On

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respondent =enith Insurance "orporation. On

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>?182

. ehold

222

1.%3

@ritish

/ssco."o.

Inc.

FFF5F1

12,222

%8,3>&.32

Poli

c)No.

"o#pa

n)

Ris!

Insure

s

Pa)s

FI"*

31%>3

SSS

/c

cre

dit

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ed-roup

ofInsurers

@uildin(

P01,222

P>,>21.?'

Totals

P38

1,222

P82,01'.

>3

Ce are shoin( hereunder another apportion#ent of the loss hichincludes the Travellers Multi*Inde#nit) polic) for referencepurposes.

Po

lic)No.

"

o#pan)

Ri

s!

In

Aures

Pa

)s

MIRO

=enith

F*2012

Insurance

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2

"orp.

@uildin(

P12,

222

P33,>''.

3?

F*>?18

2

Phil.

@ritish

/ssco."

o.

I*@uildin(

'2,222

3&,&0>.22

II*@uildin(

FFF

5P:

12,

222

0?,83

>.'8

PV"

SSS

/ccred

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*313>3

ited

-roupof

Insu

rers

@uildi

n(

01,

222

1,8%>.

12

F*188D

V

Insurers

I*Ref

%2,222

3?,?&'.%3

Multi

II*@uildin(

'2,222

3&,&0>.22

Totals

P08

1.222

P82,01'.

>3

@ased on the co#putation of the loss, includin( the Travellers Multi*Inde#nit), respondents, =enith Insurance, Phil. @ritish /ssurance

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and S.S.S. /ccredited -roup of Insurers, paid their correspondin(shares of the loss. "o#plainants ere paid the folloin(+P?3,1?&.'8 b) Philippine @ritish /ssurance "o., P33,>''.3? b)=enith Insurance "orporation, and P1,8%&.1' b) S.S.S. -roup of

/ccredited Insurers 6Par. &. /#ended "o#plaint7. De#and as

#ade fro# respondent Travellers Multi*Inde#nit) for its share in theloss but the sa#e as refused. Bence, co#plainants de#andedfro# the other three 6%7 respondents the balance of each share inthe loss based on the co#putation of the /dAust#ent StandardsReport e4cludin( Travellers Multi*Inde#nit) in the a#ount ofP%2,>8?.%3 6P1,'%0.'8*=enith Insurance+ P00,08?.&0, Phil. @ritish+and P0,>&&.82, SSS /ccredited7 but the sa#e as refused, hence,this action.

In their ansers, Philippine @ritish /ssurance and =enith Insurance

"orporation ad#itted the #aterial alle(ations in the co#plaint, butdenied liabilit) on the (round that the clai# of the co#plainants hadalread) been aived, e4tin(uished or paid. @oth co#panies set upcounterclai# in the total a#ount of P 83,1?&.'8.

Instead of filin( an anser, SSS /ccredited -roup of Insurersinfor#ed the "o##ission in its letter of .1' in full, based on the /dAust#ent Standards "orporationReport of Septe#ber 00, 38'1.

Travellers Insurance, on its part, ad#itted the issuance of thePolic) 'o. 599 ()and alle(ed as its special and affir#ativedefenses the folloin(, to it+ that Fire Polic) 'o. 599 (), coverin(the furniture and buildin( of co#plainants as secured b) acertainAr$enio Chua, #ort(a(e creditor, for the purpose ofprotectin( his #ort(a(e credit a(ainst the co#plainantsE that thesaid polic) as issued in the na#e of /ucena Palo#o, onl) toindicate that she ons the insured pre#isesE that the polic) containsan endorse#ent in favor of /rsenio "hua as his #ort(a(e interest#a) appear to indicate that insured as /rsenio "hua and the

co#plainantsE that the pre#iu# due on said fire polic) as paid b)/rsenio "huaE that respondent Travellers is not liable to pa)co#plainants.

On Ma) %3, 38'', Tai Ton( "huache 5 "o. filed a co#plaint inintervention clai#in( the proceeds of the fire Insurance Polic) No. F*118 DV, issued b) respondent Travellers Multi*Inde#nit).

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Travellers Insurance, in anser to the co#plaint in intervention, alle(ed that theIntervenor is not entitled to inde#nit) under its Fire Insurance Polic) for lac! of insurableinterest before the loss of the insured pre#ises and that the co#plainants, spousesPedro and /ucena Palo#o, had alread* paid in full their mortgage indebtedne$$ to the

inter%enor. 3

/s adverted to above respondent Insurance "o##ission dis#issed spousesPalo#os9 co#plaint on the (round that the insurance polic) subAect of theco#plaint as ta!en out b) Tai Ton( "huache 5 "o#pan), petitioner herein, forits on interest onl) as #ort(a(ee of the insured propert) and thus co#plainantas #ort(a(ors of the insured propert) have no ri(ht of action a(ainst hereinrespondent. It li!eise dis#issed petitioner9s co#plaint in intervention in thefolloin( ords+

Ce #ove on the issue of liabilit) of respondent Travellers Multi*Inde#nit) to theIntervenor*#ort(a(ee. The co#plainant testified that she as still indebted to Intervenorin the a#ount of P322,222.22. Such alle(ation has not hoever, been sufficientl) proven

b) docu#entar) evidence. The certification 6:4hibit 9:*e97 issued b) the "ourt of FirstInstance of Davao, @ranch 33, indicate that the co#plainant as /ntonio ope "hua

and not Tai Ton( "huache 5 "o#pan). )

Fro# the above decision, onl) intervenor Tai Ton( "huache filed a #otion forreconsideration but it as li!eise denied hence, the present petition.

It is the contention of the petitioner that respondent Insurance "o##issiondecided an issue not raised in the pleadin(s of the parties in that it ruled that acertain /rsenio ope "hua is the one entitled to the insurance proceeds and notTai Ton( "huache 5 "o#pan).

This "ourt cannot fault petitioner for the above erroneous interpretation of thedecision appealed fro# considerin( the #anner it as ritten. 5/s correctl)pointed out b) respondent insurance co##ission in their co##ent, the decisiondid not pronounce that it as /rsenio ope "hua ho has insurable interestover the insured propert). Perusal of the decision reveals hoever that it readil)absolved respondent insurance co#pan) fro# liabilit) on the basis of theco##issioner9s conclusion that at the ti#e of the occurrence of the peril insureda(ainst petitioner as #ort(a(ee had no #ore insurable interest over the insuredpropert). It as based on the inference that the credit secured b) the #ort(a(ed

propert) as alread) paid b) the Palo#os before the said propert) as (utteddon b) fire. The fore(oin( conclusion as arrived at on the basis of thecertification issued b) the then "ourt of First Instance of Davao, @ranch II that ina certain civil action a(ainst the Palo#os, /ntonio ope "hua stands as theco#plainant and not petitioner Tai Ton( "huache 5 "o#pan).

Ce find the petition to be i#pressed ith #erit. It is a ell !non postulate thatthe case of a part) is constituted b) his on affir#ative alle(ations. Gnder

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Section 3, Rule 3%3*each part) #ust prove his on affir#ative alle(ations b) thea#ount of evidence reuired b) la hich in civil cases as in the present case ispreponderance of evidence. The part), hether plaintiff or defendant, hoasserts the affir#ative of the issue has the burden of presentin( at the trial sucha#ount of evidence as reuired b) la to obtain favorable Aud(#ent. 7Thus,

petitioner ho is clai#in( a ri(ht over the insurance #ust prove its case.i!eise, respondent insurance co#pan) to avoid liabilit) under the polic) b)settin( up an affir#ative defense of lac! of insurable interest on the part of thepetitioner #ust prove its on affir#ative alle(ations.

It ill be recalled that respondent insurance co#pan) did not assail the validit) ofthe insurance polic) ta!en out b) petitioner over the #ort(a(ed propert). Neitherdid it den) that the said propert) as totall) raed b) fire ithin the periodcovered b) the insurance. Respondent, as #entioned earlier advanced anaffir#ative defense of lac! of insurable interest on the part of the petitioner that

before the occurrence of the peril insured a(ainst the Palo#os had alread) paidtheir credit due the petitioner. Respondent havin( ad#itted the #aterialalle(ations in the co#plaint, has the burden of proof to sho that petitioner hasno insurable interest over the insured propert) at the ti#e the contin(enc) too!place. Gpon that point, there is a failure of proof. Respondent, it ill be noted,e4erted no effort to present an) evidence to substantiate its clai#, hilepetitioner did. For said respondent9s failure, the decision #ust be adverse to it.

Boever, as adverted to earlier, respondent Insurance "o##ission absolvedrespondent insurance co#pan) fro# liabilit) on the basis of the certification

issued b) the then "ourt of First Instance of Davao, @ranch II, that in a certaincivil action a(ainst the Palo#os, /rsenio ope "hua stands as the co#plainantand not Tai Ton( "huache. Fro# said evidence respondent co##ission inferredthat the credit e4tended b) herein petitioner to the Palo#os secured b) theinsured propert) #ust have been paid. Such is a (larin( error hich this "ourtcannot sanction. Respondent "o##ission9s findin(s are based upon a #ereinference.

The record of the case shos that the petitioner to support its clai# for theinsurance proceeds offered as evidence the contract of #ort(a(e 6:4h. 37 hichhas not been cancelled nor released. It has been held in a lon( line of cases that

hen the creditor is in possession of the docu#ent of credit, he need not provenon*pa)#ent for it is presu#ed. 8The validit) of the insurance polic) ta!en bpetitioner as not assailed b) private respondent. Moreover, petitioner9s clai#that the loan e4tended to the Palo#os has not )et been paid as corroboratedb) /ucena Palo#o ho testified that the) are still indebted to herein petitioner. 9

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Public respondent ar(ues hoever, that if the civil case reall) ste##ed fro# theloan (ranted to /ucena Palo#o b) petitioner the sa#e should have beenbrou(ht b) Tai Ton( "huache or b) its representative in its on behalf. Fro# theabove pre#ise respondent concluded that the obli(ation secured b) the insuredpropert) #ust have been paid.

The pre#ise is correct but the conclusion is ron(. "itin( Rule %, Sec.0 1+respondent pointed out that the action #ust be brou(ht in the na#e of thereal part) in interest. Ce a(ree. Boever, it should be borne in #ind thatpetitioner bein( a partnership #a) sue and be sued in its na#e or b) its dul)authoried representative. The fact that /rsenio ope "hua is the representativeof petitioner is not uestioned. Petitioner9s declaration that /rsenio ope "huaacts as the #ana(in( partner of the partnership as corroborated b) respondentinsurance co#pan). 11Thus "hua as the #ana(in( partner of the partnership#a) e4ecute all acts of ad#inistration 12includin( the ri(ht to sue debtors of the

partnership in case of their failure to pa) their obli(ations hen it beca#e dueand de#andable. Or at the ver) least, "hua bein( a partner of petitioner Tai Ton("huache 5 "o#pan) is an a(ent of the partnership. @ein( an a(ent, it isunderstood that he acted for and in behalf of the fir#.13Public respondent9salle(ation that the civil case flied b) /rsenio "hua as in his capacit) aspersonal creditor of spouses Palo#o has no basis.

The respondent insurance co#pan) havin( issued a polic) in favor of hereinpetitioner hich polic) as of le(al force and effect at the ti#e of the fire, it isbound b) its ter#s and conditions. Gpon its failure to prove the alle(ation of lac!

of insurable interest on the part of the petitioner, respondent insurance co#pan)is and #ust be held liable.

IN VI:C OF TB: FOR:-OIN-, the decision appealed fro# is hereb) S:T/SID: and /NOTB:R Aud(#ent is rendered order private respondent TravellersMulti*Inde#nit) "orporation to pa) petitioner the face value of Insurance Polic)No. 188*DV in the a#ount of P322,222.22. "osts a(ainst said privaterespondent.

SO ORD:R:D.

Teehan+ee, C.., 'ar%a$a, Cruz and -rio#A/uino, ., concur.

Foo$oe

3 Penned b) "o##issioner -re(oria "ru*/rnaldo

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0 Filed b) Pedro Palo#o and /ucena Palo#o.

% Pa(es %2*%?, Rollo.

? Pa(es %1*%&, Rollo.

1 See Supra.

& Revised Rules of "ourt.

' Vol. &, Moran, Revised Rules of "ourt, Pa(e ?,38>2 :d.

> Veloso vs. Veloso, > Phil. >%E Merchant vs. International @an!in("orporation, 8 Phil. 11?E Miller vs. E "hua vs.Var(as, 33 Phil. 038E -ana va. Sheriff of a(una, et al., %0 Phil. 0%&.

8 Pa(es ?, &, Decision, I.". "ase No. %&'.

32 Revised Rules of "ourt.

33 Pa(e ?, Decision, 0upra. 6Respondent referred to the petitionerand /rsenio ope "hua interchan(eabl)7.

30 /rt. 3>22 "ivil "ode.

3% @achrach vs. a Protectors, %' Phil. ??3, 383>.