INSURANCE

WEEK 6 (FINALS)

1. The petitioner’s claim is not tenable. Petitioner cannot adopt the argument that the "arrest" caused by ordinary judicial
process is not included in the covered risk simply because the F.C. & S. Clause under the Institute War Clauses can only
be operative in case of hostilities or warlike operations on account of its heading "Institute War Clauses." Although the
F.C. & S. Clause may have originally been inserted in marine policies to protect against risks of war, its interpretation in
recent years to include seizure or detention by civil authorities seems consistent with the general purposes of the clause.
In fact, petitioner itself averred that subsection 1.1 of Section 1 of the Institute War Clauses included "arrest" even if it
were not a result of hostilities or warlike operations. In this regard, since what was also excluded in the deleted F.C. &
S. Clause was "arrest" occasioned by ordinary judicial process, logically, such "arrest" would now become a covered risk
under subsection 1.1 of Section 1 of the Institute War Clauses, regardless of whether or not said "arrest" by civil
authorities occurred in a state of war.

2. Oriental Assurance is absolved from liability under its marine insurance policy No. OAC-M-86/002. The insurer's
liability was for "total loss only." A total loss may be either actual or constructive. For the purpose of computing the
more than three-fourths value of the logs actually lost is considered as constructive total loss. However, of the entirety
of 1,208, pieces of logs, only 497 pieces thereof were lost or 41.45% of the entire shipment. Since the cost of those 497
pieces does not exceed 75% of the value of all 1,208 pieces of logs, the shipment cannot be said to have sustained a
constructive total loss under Section 139(a) of the Insurance Code. In the absence of either actual or constructive total
loss, there can be no recovery by the insured Panama against the insurer, Oriental Assurance.

3. The rider prevails over the printed provisions. It is a well settled rule that in case repugnance exists between written
and printed portions of a policy, the written portion prevails, and there can be no question that as far as any
inconsistency exists, the above-mentioned typed "rider" prevails over the printed clause it covers. Section 291 of the
Code of Civil Procedure provides that "when an instrument consists partly of written words and partly of a printed form
and the two are inconsistent, the former controls the latter.”

4. The claim is not tenable. The property insured consisted mainly of household furniture kept for the purpose of sale.
The preservation of the furniture in a salable condition by retouching or otherwise was incidental to the business. The
alcohol was used in preparing varnish for the purpose of retouching. It is well settled that the keeping of inflammable
oils on the premises, though prohibited by the policy, does not void it if such keeping is incidental to the business. The
same premise is sufficient in answer the objection that the insured automobile contained gasoline and that the plaintiff
on one occasion was seen in the bodega with a lighted lamp. The first was incidental to the use of the insured article,
and the second is for the purposes of operation.

5. The defense is unmeritorious. The main issue on this appeal is as to the value of the property. After a careful
examination of the evidence, we are of the opinion that there is no satisfactory evidence that the plaintiff included in
his itemized list of property contained in the house at the time of the fire, any property which was not there. The plaintiff
prepared the list from memory, and absolute accuracy could hardly be expected. The cross-examination of the plaintiff
at the trial did not develop anything material in the way of contradiction to the list of property submitted by him. As to
the values set out opposite the various items in the plaintiff's list, much the same reasoning must be applied. After an
inspection of each separate article in the list, the Supreme Court held that it is not prepared to say that the prices are
fabulous.