17. ARMANDO GEAGONIA V.

COURT OF APPEALS
G.R. No. 114427 | February 6, 1995

Topic: Double Insurance

Doctrine: A double insurance exists where the same person is insured by several
insurers separately in respect of the same subject and interest. As earlier stated, the insurable
interests of a mortgagor and a mortgagee on the mortgaged property are distinct and separate.
The insurable interests of a mortgagor and a mortgagee on the mortgaged property are distinct
and separate

FACTS:
Geagonia, owner of a store, obtained from Country Bankers a fire insurance policy for
P100,000.00. The 1-year policy covered the stock trading of dry goods. The policy provides for
‘Condition No. 3’ – the requirement of which is that, among others, notice must be given to the
insurance company of any insurance or insurances already effected, covering any of the
property or properties consisting of stock in trade, goods in process and/or insurances stated or
endorsed in the said policy before the occurrence of any loss or damage. It further noted that
failure to do said requirement should forfeit the company to all benefits under the policy. Further,
the policy provides for insured’s declaration on the subheading CO-INSURANCE that the co-
insurer is Mercantile Insurance Co., Inc. in the sum of P50,000.00.

Thereafter, the petitioners’ stocks were destroyed by fire. He then filed a claim which
was subsequently denied because the petitioner’s stocks were covered by two other fire
insurance policies for Php 200,000 issued by PFIC. Respondent alleged, among others, that it
denied Petitioner’s claim because of failure to give notice of other insurances, as provided in the
policy.

Geagonia then filed a complaint against the private respondent in the Insurance
Commission for the recovery of P100,000.00 under fire insurance policy and damages,
claiming that he knew the existence of the other two policies. But, he said that he had no
knowledge of the provision in the private respondent's policy requiring him to inform it of the
prior policies and this requirement was not mentioned to him by the private respondent's
agent. .

The Insurance Commission found that the petitioner did not violate Condition 3 as he
had no knowledge of the existence of the two fire insurance policies obtained from the PFIC;
Court of Appeals reversed the decision of the Insurance Commission because it found that the
petitioner knew of the existence of the two other policies issued by the PFIC and, therefore,
violative of double insurance.

Petitioner contends that the prohibition under ‘Condition No. 3’ applies only to situation
where there is double insurance and that it cannot be applied in this case as there is no double
insurance.

ISSUE:
Whether or not there is double insurance in this case? NO.
RULING:

The prohibition under the Condition No. 3 applies only to double insurance which is not
existing in this case, by virtue of the portion of the condition referring to other insurance
"covering any of the property or properties consisting of stocks in trade, goods in process and/or
inventories only hereby insured," and the portion regarding the insured's declaration on the
subheading CO-INSURANCE that the co-insurer is Mercantile Insurance Co., Inc. in the sum of
P50,000.00.

A double insurance exists where the same person is insured by several insurers
separately in respect of the same subject and interest. It must be noted that the insurable
interests of a mortgagor and a mortgagee on the mortgaged property are distinct and separate.

Since the two policies of the PFIC do not cover the same interest as that covered by
the policy of the private respondent, no double insurance exists. The non-disclosure then of
the former policies was not fatal to the petitioner's right to recover on the private respondent's
policy.