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INSURANCE LAWbarcrammer_jedlimitation to commence action/insurable interest in property
FILIPINO MERCHANTS INSURANCE CO., Inc. v. CA
GR No. 85141 Nov. 28, 1989 Second Division [Regalado]
Petition for review on certiorari challenging a CA decision finding FilMerchant liable to pay plaintiff.
This is the story of your mom’s life. (oops.)This is a story about a consignee/buyer who bought fishmeal products from Bangkok and had itdelivered to the port of Manila. He entered into an insurance contract with defendant insurance company(FilMerchant) under policy no. M-2678 for P267,653.59 and for goods described as 600 metric tons of fishmeal in new gunny bags of 90 kilos each. What was actually imported was 59.940mtons in 666gunny bags. Upon arrival at Manila, arrastre and defendant’s surveyor found 227 bags in bad order condition. Because of this loss, buyer formally claimed from FilMerchant but the said insurancecompany refused to pay. He brought suit. Trial court ruled for him and against FilMerchant, CAaffirmed trial court hence this petition.FilMerchant argues:(1) CA erred in the interpretation and application of the “all risk” clause of maritime insurance policy. It says it should not be held liable for partial loss notwithstanding the clear absence of proof of some fortuitous event, casualty, or accidental cause to which the loss is attributable.(2) Respondent had no insurable interest in the subject cargo. The shipment reveals that it is a “C& F” contract of shipment. The seller, not the consignee, paid for the shipment. As there was yetno delivery to the consignee, ownership (and interest) does not yet pass to him.
W/N CA was correct in its interpretation of the “all risk” clause in the maritime insurancecontract.W/N the insured had insurable interest over the property insured.
a)“All risks policy” has no technical meaning.
The clause in question reproduced:
“5. This insurance is against all risks of loss or damage to the subject-matter insured but shall in no case be deemed toextend to cover loss, damage, or expense proximately caused by delay or inherent vice or nature of the subject-matter insured. Claims recoverable hereunder shall be payable irrespective of percentage
An "all risks policy" should be read literally as meaning all risks whatsoever and covering all losses by an accidentalcause of any kind. The very nature of the term "all risks" must be given a broad and comprehensive meaning as coveringany loss other than a willful and fraudulent act of the insured.
This is pursuant to the very purpose of an "all risks"insurance to give protection to the insured in those cases where difficulties of logical explanation or some mysterysurround the loss or damage to property.
Burden of proof shifts to the insurer.
Generally, the burden of proof is upon the insured to show that a loss arose from a covered peril, but under an "all risks" policy the burden is not on the insured to prove the precise cause of loss or damage for which it seeks compensation. Theinsured under an "all risks insurance policy" has the initial burden of proving that the cargo was in good condition when