SECOND DIVISION
agreed "to pay two thousand pesos, at the home office of the Company, in
[G.R. No. L-2227. August 31, 1948.]
Intestate estate of the late Esperanza J. Villanueva. PABLO ORO,
administrator; MARIANO J. VILLANUEVA, claimant-appellant.
Nicolas P. Nonato for claimant and Appellant.
Rodrigo J. Harder for administrator and appellee.
SYLLABUS
INSURANCE; LIFE; BENEFICIARY; PROCEEDS, TO WHOM
PAYABLE WHEN INSURED OUTLIVES POLICY. — Where the
insurer obligates itself, under the life insurance policy, to pay
the proceeds to the insured if the latter lives on the date of
maturity or to the designated beneficiary if the insured dies
during the continuance of the policy, and where the insured
outlives the policy, the proceeds shall be payable exclusively
to the insured or his assignee, the benefit of the policy inuring
to the beneficiary only in case the insured dies during its
continuance.
DECISION
PARAS, J.:
The West Coast Life Insurance Company issued two policies of
insurance on the life of Esperanza J. Villanueva , one for two
thousand pesos and maturing on April 1, 1943, and the other for three
thousand pesos and maturing on March 31, 1943. In both policies (with
corresponding variation in amount and date of maturity) the insurer
San Francisco, California, to the insured hereunder, if living, on the
1st day of April 1943, or to the beneficiary Bartolome
Villanueva, father of the insured, immediately upon receipt of due
proof of the prior death of the insured, Esperanza J. Villanueva, of La Paz,
Philippine Islands, during the continuance of this policy, with right on the
part of the insured to change the beneficiary."cralaw virtua1aw library
Bartolome Villanueva in 1940, the latter was
After the death of
duly substituted as beneficiary under the policies by Mariano
J. Villanueva, a brother of the insured. Esperanza J.
Villanueva survived the insurance period, for she died
only on October 15, 1944, without, however,
collecting the insurance proceeds. Adverse claims for said
proceeds were presented by the estate of Esperanza J. Villanueva on the
one hand and by Mariano J. Villanueva on the other, which conflict was
squarely submitted in the intestate proceedings of Esperanza J. Villanueva
pending in the Court of First Instance of Iloilo. From an order, dated
February 26, 1947, holding that the estate of the insured is
entitled to the insurance proceeds, to the exclusion of the
beneficiary, Mariano J. Villanueva, the latter has interposed
the present appeal.
The lower court committed no error. Under the policies, the insurer
obligated itself to pay the insurance proceeds (1) to the insured if the
latter lived on the dates of maturity or (2) to the beneficiary if
the insured died during the continuance of the policies. The first
contingency of course excludes the second, and vice versa. In other words,
as the insured Esperanza J. Villanueva was living on April 1, and March 31,
1943, the proceeds are payable exclusively to her or to her estate unless
she had before her death otherwise assigned the matured policies. (It is
not here pretended and much less proven, that there was such
assignment.) The beneficiary, Mariano J. Villanueva, could be entitled to
said proceeds only in default of the first contingency. To sustain the benefit of the policy will only inure to such beneficiary in case the assured
beneficiary’s claim would be to altogether eliminate from the policies the dies before the end of the period designated in the policy." (Couch,
condition that the insurer "agrees to pay . . . to the insured hereunder, if Cyclopedia of Insurance Law, Vol. 2, sec. 343, p. 1023.) "Under endowment
living." or tontine policies payable to the insured at the expiration of a certain
period, if alive, but providing for the payment of a stated sum to a
There is nothing in the Insurance Law (Act No. 2427) that militates against designated beneficiary in case of the insured’s death during the period
the construction placed by the lower court on the disputed condition mentioned, the insured and the beneficiary take contingent interests. The
appearing in the two policies now under advisement. On the contrary, said interest of the insured in the proceeds of the insurance depends upon his
law provides that "an insurance upon life may be made payable on the survival of the expiration of endowment period. Upon the insured’s death,
death of the person, or on his surviving a specified period, or otherwise within the period, the beneficiary will take, as against the personal
contingently on the continuance or cessation of life" (section 165), and that representative or the assignee of the insured. Upon the other hand, if the
"a policy of insurance upon life or health may pass by insured survives the endowment period, the benefits are payable to him or
to his assignee, notwithstanding a beneficiary is designated in the policy."
transfer, will, or succession, to any person, whether (29 Am. Jur., section 1277, pp. 952, 953.)
he has an insurable interest or not, and such person
The appealed order is, therefore, hereby affirmed, and it is so ordered with
may recover upon it whatever the insured might have costs against the Appellant.
recovered"(section166).
Feria, Pablo, Perfecto, Bengzon, Briones, Padilla, and Tuason, JJ., concur.
Counsel for the beneficiary invokes the decision in Del Val v. Del Val, 29
Phil., 534, 540, in which it was held that "the proceeds of an insurance
policy belong exclusively to the beneficiary and not to the estate of the
person whose life was insured, and that such proceeds are the separate
and individual property of the beneficiary, and not of the heirs of the
person whose life was insured." This citation is clearly not controlling, first,
because it does not appear therein that the insurance contract contained
the stipulation appearing in the policies issued on the life of Esperanza J.
Villanueva and on which the appealed order in the case at bar is based;
and, secondly, because the Del Val doctrine was made upon the authority
of the provisions of the Code of Commerce relating to insurance
(particularly section 428) which had been expressly repealed by the
present Insurance ActNo.2427.

Our pronouncement is not novel, since it tallies with the following typical
American authorities: "If a policy of insurance provides that the proceeds
shall be payable to the assured, if he lives to a certain date, and, in case of
his death before that date, then they shall be payable to the beneficiary
designated, the interest of the beneficiary is a contingent one, and the

G.R. No. L-14300 January 19, 1920
SAN MIGUEL BREWERY, ETC., plaintiff-appellee,
vs.
LAW UNION AND ROCK INSURANCE CO., (LTD.) ET AL., defendants-
appellees.
HENRY HARDING, defendant-appellant.
Crossfield and O'Brien for appellant Harding.
Lawrence and Ross for appellee Law Union etc. Ins. Co.
Sanz and Luzuriaga for appellee "Filipinas, Compañia de Seguros."
No appearance for the other appellee.
STREET, J.:
This action was begun on October 8, 1917, in the Court of First Instance of
the city of Manila by the plaintiff, the San Miguel Brewery, for the purpose
of recovering upon two policies of insurance underwritten respectively by
Law Union and Rock Insurance Company (Ltd.), and the "Filipinas"
Compania de Seguros, for the sum of P7,500 each, insuring certain
property which has been destroyed by fire. The plaintiff, the San Miguel
Brewery, is named as the party assured in the two policies referred to, but
it is alleged in the complaint that said company was in reality interested in
the property which was the subject of insurance in the character of a
mortgage creditor only, and that the owner of said property upon the date
the policies were issued was one D. P. Dunn who was later succeeded as
owner by one Henry Harding. Accordingly said Harding was made a
defendant, as a person interested in the subject of the litigation.
The prayer of the complaint is that judgment be entered in favor of the
plaintiff against the two companies named for the sum of P15,000, with
interest and costs, and further that upon satisfaction of the balance of
P4,505.30 due to the plaintiff upon the mortgage debt, and upon the
cancellation of the mortgage, the plaintiff be absolved from liability to the
defendants or any of them. The peculiar form of the latter part of the
prayer is evidently due to the design of the plaintiff to lay a foundation for
Harding to recover the difference between the plaintiff's credit and the
amount for which the property was insured. Accordingly, as was to be
expected, Harding answered, admitting the material allegations of the
complaint and claiming for himself the right to recover the difference
between the plaintiff's mortgage credit and the face value of the policies.
The two insurance companies also answered, admitting in effect their
liability to the San Miguel Brewery to the extent of its mortgage credit, but
denying liability to Harding on the ground that under the contracts of
insurance the liability of the insurance companies was limited to the
insurable interest of the plaintiff therein. Soon after the action was begun
the insurance companies effected a settlement with the San Miguel
Brewery by paying the full amount of the credit claimed by it, with the
result that the litigation as between the original plaintiff and the two
insurance companies came to an end, leaving the action to be prosecuted
to final judgement by the defendant Harding with respect to the balance
claimed to be due to him upon the policies.
Upon hearing the evidence the trial judge came to the conclusion that
Harding had no right of action whatever against the companies and
absolved them from liability without special finding as to costs. From this
decision the said Henry Harding has appealed.
The two insurance companies who are named as defendants do not
dispute their liability to the San Miguel Brewery, to the extent already
stated, and the only question here under discussion is that of the liability of
the insurance companies to Harding. It is therefore necessary to take
account of such facts only as bear upon this aspect of the case.
In this connection it appears that on January 12, 1916, D. P. Dunn, then the
owner of the property to which the insurance relates, mortgaged the same
to the San Miguel Brewery to secure a debt of P10,000. In the contract of
mortgage Dunn agreed to keep the property insured at his expense to the
full amount of its value in companies to be selected by the Brewery
Company and authorized the latter in case of loss to receive the proceeds
of the insurance and to retain such part as might be necessary to cover the
mortgage debt. At the same time, in order more conveniently to
accomplish the end in view, Dunn authorized and requested the Brewery
Company to effect said insurance itself. Accordingly on the same date
Antonio Brias, general manager of the Brewery, made a verbal application
to the Law Union and Rock Insurance Company for insurance to the extent
of P15,000 upon said property. In reply to a question of the company's
agent as to whether the Brewery was the owner of the property, he stated
that the company was interested only as a mortgagee. No information was
asked as to who was the owner of the property, and no information upon
this point was given.
It seems that the insurance company to whom this application was
directed did not want to carry more than one-half the risk. It therefore
issued its own policy for P7,500 and procured a policy in a like amount to
be issued by the "Filipinas" Compania de Seguros. Both policies were
issued in the name of the San Miguel Brewery as the assured, and
contained no reference to any other interest in the property. Both policies
contain the usual clause requiring assignments to be approved and noted
on the policy. The premiums were paid by the Brewery and charged to
Dunn. A year later the policies were renewed, without change, the renewal
premiums being paid by the Brewery, supposedly for the account of the
owner. In the month of March of the year 1917 Dunn sold the insured
property to the defendant Henry Harding, but not assignment of the
insurance, or of the insurance policies, was at any time made to him.
We agree with the trial court that no cause of action in Henry Harding
against the insurance companies is show. He is not a party to the contracts
of insurance and cannot directly maintain an action thereon. (Uy Tam and
Uy Yet vs. Leonard, 30 Phil. Rep., 471.) His claim is merely of an equitable
and subsidiary nature and must be made effective, if at all, through the San
Miguel Brewery in whose name the contracts are written. Now the
Brewery, as mortgagee of the insured property, undoubtedly had an
insurable interest therein; but it could not, in any event, recover upon
these policies an amount in excess of its mortgage credit. In this
connection it will be remembered that Antonio Brias, upon making
application for the insurance, informed the company with which the
insurance was placed that the Brewery was interested only as a
mortgagee. It would, therefore, be impossible for the Brewery mortgage
on the insured property.
This conclusion is not only deducible from the principles governing the
operation and effect of insurance contracts in general but the point is
clearly covered by the express provisions of sections 16 and 50 of the
Insurance Act (Act No. 2427). In the first of the sections cited, it is declared
that "the measure of an insurable interest in property is the extent to
which the insured might be damnified by loss or injury thereof" (sec. 16);
while in the other it is stated that "the insurance shall be applied
exclusively to the proper interest of the person in whose name it is made
unless otherwise specified in the policy" (sec. 50).
These provisions would have been fatal to any attempt at recovery even by
D. P. Dunn, if the ownership of the property had continued in him up to the
time of the loss; and as regards Harding, an additional insuperable obstacle
is found in the fact that the ownership of the property had been charged,
prior to the loss, without any corresponding change having been effected
in the policy of insurance. In section 19 of the Insurance Act we find it
stated that "a change of interest in any part of a thing insured
unaccompanied by a corresponding change of interest in the insurance,
suspends the insurance to an equivalent extent, until the interest in the
thing and the interest in the insurance are vested in the same person."
Again in section 55 it is declared that "the mere transfer of a thing insured
does not transfer the policy, but suspends it until the same person
becomes the owner of both the policy and the thing insured."
Undoubtedly these policies of insurance might have been so framed as to
have been "payable to the Sane Miguel Brewery, mortgagee, as its interest
may appear, remainder to whomsoever, during the continuance of the risk,
may become the owner of the interest insured." (Sec 54, Act No. 2427.)
Such a clause would have proved an intention to insure the entire interest
in the property, not merely the insurable interest of the San Miguel
Brewery, and would have shown exactly to whom the money, in case of
loss, should be paid. But the policies are not so written.
It is easy to collect from the facts stated in the decision of the trial judge,
no less than from the testimony of Brias, the manager of the San Miguel
Brewery, that, as the insurance was written up, the obligation of the
insurance companies was different from that contemplated by Dunn, at
whose request the insurance was written, and Brias. In the contract of
mortgage Dunn had agreed, at his own expense, to insure the mortgaged
property for its full value and to indorse the policies in such manner as to
authorize the Brewery Company to receive the proceeds in case of loss and
to retain such part thereof as might be necessary to satisfy the remainder
then due upon the mortgage debt. Instead, however, of effecting the
insurance himself Dunn authorized and requested the Brewery Company
to procure insurance on the property in the amount of P15,000 at Dunn's
expense. The Brewery Company undertook to carry this mandate into
effect, and it of course became its duty to procure insurance of the
character contemplated, that is, to have the policies so written as to
protect not only the insurable interest of the Brewery, but also the owner.
Brias seems to have supposed that the policies as written had this effect,
but in this he was mistaken. It was certainly a hardship on the owner to be
required to pay the premiums upon P15,000 of insurance when he was
receiving no benefit whatever except in protection to the extent of his
indebtedness to the Brewery. The blame for the situation thus created
rests, however, with the Brewery rather than with the insurance
companies, and there is nothing in the record to indicate that the
insurance companies were requested to write insurance upon the
insurable interest of the owner or intended to make themselves liable to
that extent.
If during the negotiations which resulted in the writing of this insurance, it
had been agreed between the contracting parties that the insurance
should be so written as to protect not only the interest of the mortgagee
but also the residuary interest of the owner, and the policies had been, by
inadvertence, ignorance, or mistake written in the form in which they were
issued, a court would have the power to reform the contracts and give
effect to them in the sense in which the parties intended to be bound. But
in order to justify this, it must be made clearly to appear that the minds of
the contracting parties did actually meet in agreement and that they
labored under some mutual error or mistake in respect to the expression
of their purpose. Thus, in Bailey vs. American Central Insurance Co. (13
Fed., 250), it appeared that a mortgage desiring to insure his own insurable
interest only, correctly stated his interest, and asked that the same be
insured. The insurance company agreed to accept the risk, but the policy
was issued in the name of the owner, because of the mistaken belief of the
company's agent that the law required it to be so drawn. It was held that a
court of equity had the power, at the suit of the mortgage, to reform the
instrument and give judgment in his favor for the loss thereunder,
although it had been exactly as it was. Said the court: "If the applicant
correctly states his interest and distinctly asks for an insurance thereon,
and the agent of the insurer agrees to comply with his request, and
assumes to decide upon the form of the policy to be written for that
purpose, and by mistake of law adopts the wrong form, a court of equity
will reform the instrument so as to make it insurance upon the interest
named." (See also Fink vs. Queens Insurance Co., 24 Fed., 318; Esch vs.
Home Insurance Co., 78 Iowa, 334; 16 Am. St. Rep., 443; Woodbury Savings
etc., Co., vs. Charter Oak Insurance Co., 31 Conn., 517; Balen vs. Hanover
Fire Insurance Co., 67 Mich., 179.)
Similarly, in cases where the mortgage is by mistake described as owner,
the court may grant reformation and permit a recovery by the mortgage in
his character as such. (Dalton vs. Milwaukee etc. Insurance Co., 126 Iowa,
377; Spare vs. Home Mutual Insurance Co., 17 Fed., 568.) In Thompson vs.
Phoenix Insurance Co. (136 U.S., 287; 34 L. 3d., 408), it appeared that one
Kearney made application to an insurance company for insurance on
certain property in his hands as receiver and it was understood between
him and the company's agent that, in case of loss, the proceeds of the
policy should accrue to him and his successors as receiver and to others
whom it might concern. However, the policy, as issued, was so worded as
to be payable only to him as receiver. In an action brought on the policy by
a successor of Kearney, it was alleged that the making of the contract in
this form was due to inadvertence, accident, and mistake upon the part of
both Kearney and the company.
Said the court:
If by inadvertence, accident, or mistake the terms of the contract were not
fully set forth in the policy, the plaintiff is entitled to have it reformed.
In another case the same court said:
We have before us a contract from which by mistake, material stipulations
have been omitted, whereby the true intent and meaning of the parties are
not fully or accurately expressed. There was a definite concluded
agreement as to insurance, which, in point of time, preceded the
preparation and delivery of the policy, and this is demonstrated by legal
and exact evidence, which removes all doubt as to the sense and
undertaking of the parties. In the agreement there has been a mutual
mistake, caused chiefly by that contracting party who now seeks to limit
the insurance to an interest in the property less than that agreed to be
insured. The written agreement did not effect that which the parties
intended. That a court of equity can afford relief in such a case, is, we
think, well settled by the authorities. (Smell vs. Atlantic, etc., Ins. Co., 98
U.S., 85, 89; 25 L. ed., 52.)

But to justify the reformation of a contract, the proof must be of the most
satisfactory character, and it must clearly appear that the contract failed to
express the real agreement between the parties. (Philippine Sugar Estates
Development Company vs. Government of the Philippine Islands, 62 L. ed.,
1177, reversing Government of Philippine Island vs. Philippine Sugar
Estates Development Co., 30 Phil. Rep., 27.)

In the case now before us the proof is entirely insufficient to authorize the
application of the doctrine state in the foregoing cases, for it is by means
clear from the testimony of Brias — and none other was offered — that the
parties intended for the policy to cover the risk of the owner in addition to
that of the mortgagee. It results that the defendant Harding is not entitled
to relief in any aspect of the case.

The judgment is therefore affirmed, with costs against the appellant. So

ordered.

Arellano, C.J., Johnson, Araullo, Malcolm and Avanceña, JJ., concur.


ISSUE: Whether said goods were worth what the
plaintiff claims, that is, about equal to the amount for
which they were insured in the four above
mentioned assurance companies, including the
defendant in this case? YES
an action to recover of the defendant the Yek Tong Lin
This is
Fire & Marine Insurance Co., Ltd., the amount of two
insurance policies totaling P100, 000 upon leaf tobacco
belonging to the plaintiff, which was damaged by the fire that
destroyed the building on Soler Street No. 188, where said
tobacco was stored, on January 11, 1928.
Thedefendant filed a general and specific denial of each and
every allegation of the complaint, set up three special defenses, and
prayed to be absolved from the complaint with costs against the plaintiff.
After the case was tried, the court below rendered judgment as
follows:

In this case and in Nos. 334568, and 33480 of this court, which, by
G.R. No. L-33131 December 13, 1930 agreement of the interested parties, were jointly tried, the plaintiff
demands P290,000 from the defendant assurance companies, alleging that
to be the amount of the insurance on his leaf tobacco which was damaged
by the fire that destroyed the warehouse at No. 188 Soler Street, Manila,
EMILIO GONZALES LA O, plaintiff-appellee,
where it was stored, on January 11, 1928, the plaintiff's claim against the
vs. herein defendant, the Yek Tong Lin Fire & Marine Insurance Co. being for
P100,000, and against the defendants in the three other cases mentioned
THE YEK TONG LIN FIRE AND MARINE INSURANCE CO., LTD., defendant- above, for P190,000.
appellant.
After the plaintiff had presented his evidence, the defendant
companies in cases Nos. 33458, 33868, and 33480, offered to
Araneta and Zaragosa for appellant. compromise with him by paying eighty-five per cent of his
Feria and La O for appellee. claim against them. In view of the fact that said defendants had in their
answer raised the question of warranties A and G of the plaintiff's policies,
providing that the building used for the effects insured would not be
occupied by any other lessee, nor would be used for the deposit of other
VILLAMOR, J.:
goods, without the consent of said defendants, and inasmuch as the latter
alleged in their answer that the owner of the burnt building had leased the
warehouse to several persons for the storage of sundry articles, the
plaintiff had to accept the proposed compromise, and in consequence
thereof, the three cases aforesaid were dismissed.
The present case followed the usual course of procedure because the
plaintiffs refused to accept the compromise which, in the same terms as
those made by the defendants in the three cases mentioned, was
proposed to him by the defendant the Yek Tong Lin Fire & Marine
Insurance Company, the plaintiff contending that said defendant did not,
nor could, raise the question of warranties A and G heretofore mentioned
for the simple reason that it was the defendant itself, as owner, who had
leased the building which later was destroyed by fire, to another person
after having already ceded a portion of it to said plaintiff.
The only question to be determined, having been raised in the defendant's
answer — both parties agreeing that the plaintiff insured his leaf tobacco
with the defendant assurance company, and that said goods were
damaged by the fire which destroyed the warehouse where they were
stored, on January 11, 1928 — is whether said goods were worth what the
plaintiff claims, that is, about equal to the amount for which they were
insured in the four above mentioned assurance companies, including the
defendant in this case.
The plaintiff has conclusively shown by the Official Register Book (Exhibit 1)
and the Official Guide (Exhibit J), furnished by the Bureau of Internal
Revenue, and kept under the supervision thereof in the usual form, in
accordance with articles 10, 34 to 38 of the Regulations of the same
promulgated under No. 17, by the Secretary of Finance; the Stock Book for
recording the quantity of tobacco, Exhibit K, kept by the plaintiff and
presented as part of the testimony of witnesses Claveria, Bonete, and
Leoncio Jose; the testimony of Estanislao Lopez, Inspector of Internal
Revenue, and the latter's report (Exhibit N), submitted to the Collector of
Internal Revenue in pursuance of article 33 of the aforementioned
Regulations; the tobacco invoices of stock damaged by the fire, Exhibits L
and L-1 to L-20; and by the testimony of Clemente Uson who went over the
plaintiff's books as auditor and public accountant, and also prepared
Exhibits T and U, attached to the record, that the plaintiff had in the
warehouse at No. 188 Soler at the time of the fire, not less, but rather
more, than 6,200 bales of leaf tobacco worth over P300,000, which is of
course more than the sum total of all the insurances taken out with the
defendant herein and the defendants in the three aforementioned cases
Nos. 33458, 33868, and 33480.lawphi1>net
The reason why the entry showing that 258 bales of tobacco had been
removed from the warehouse, appearing in the Official Register Book,
Exhibit I, was not posted in the Stock Book, Exhibit K, has been
satisfactorily explained by the plaintiff's witnesses, who stated that it was
due to the fact that there was no time to post it in the Stock Book, because
the fire took place and the plaintiff told them not to touch, and to make no
further entries in the books. Witness White, the defendant company's
adjuster, who carefully examined then plaintiff's books not only
immediately after the fire, but also during the hearing of this case, seems
not to have found any irregularity therein; at least he said nothing on the
point when he took the witness stand. On the contrary, in his report
Exhibit UU sent to the defendant herein in his capacity as adjuster,
appointed by the latter, and in Exhibits WW and XX, admitted by the Yek
Tong Lin Ins. Co., Ltd., he admitted that the leaf tobacco belonging to the
plaintiff in the warehouse when the fire took place exceeded, in quantity
and value, the amount of the insurance.
The defendant did not present evidence to rebut the plaintiff's evidence,
but only presented witness Rowlands, whose testimony or opinion as to
the probable number of bales of tobacco in the warehouse at the date of
the fire does not deserve serious consideration, not only because of the
plaintiff's evidence, but because his opinion or estimate is based solely
upon photographs of the place taken after the fire.
In view of the foregoing, the court hereby sentences the defendant the Yek
Tong Lin Fire and Marine Insurance Company, Ltd., to pay the plaintiff
Emilio Gonzales La O, the amount of one hundred thousand pesos
(P100,000), for which it had accepted the insurance on the leaf tobacco
belonging to said plaintiff, damaged by the fire which destroyed the
warehouse at No. 188 Soler Street, where it was stored, on January 11,
1928, and legal interest upon said amount from June 27, 1928, when the
complaint was filed in this case, plus the costs.
So ordered.
Manila, P. I., this 24th day of December, 1929.
ANACLETO DIAZ
Judge.
The defendant duly appealed from this judgment, alleging that the trial
court erred in making reference to the settlement arrived at by the plaintiff
and other insurance companies, and in declaring that the only question
involved in the case is whether or not the tobacco damaged by the fire is
worth at least P290,000.
There is no merit in these assignments of error. Since the settlement
between the plaintiff and the other defendant companies was reached
after the plaintiff had presented his evidence, and as those three cases
were tried jointly with the instant case, there is no valid reason why the
trial court should not refer to it in deciding this case. Furthermore, the
court's holding here assigned as error, granting there were other incidental
matters to be decided by the court, does not in itself constitute a reversible
error.
In the third assignment of error, the defendant contends that the plaintiff
cannot recover under the policy as he has failed to prove that the Bank of
the Philippine Islands, to whom the policy was made payable, no longer
has any rights and interests in it. It should be noted that the defendant did
not in its answer allege defect of parties plaintiff, and, besides, it does not
appear that the plaintiff ceded to the bank all his rights or interests in the
insurance, the note attached to the policies merely stating: "There shall be
paid to the Bank of the Philippine Islands an indemnity for any loss caused
by fire, according to the interest appearing in its favor." And the fact that
the plaintiff himself presented in evidence the policies mortgaged to the
Bank of the Philippine Islands gives rise to the presumption that the debt
thus secured has been paid, in accordance with article 1191 of the Civil
Code.
Corpus Juris, volume 26, pages 483 et seq., states:
Insured, being the person with whom the contract was made, is primarily
the proper person to bring suit thereon. Subject to some exceptions,
insured may thus sue, although the policy is taken wholly or in part for the
benefit of another person named or unnamed, and although it is expressly
made payable to another as his interest may appear or otherwise.
Although a policy issued to a mortgagor is taken out for the benefit of the
mortgagee and is made payable to him, yet the mortgagor may sue
thereon in his own name, especially where the mortgagee's interest is less
than the full amount recoverable under the policy, . . . .
And in volume 33, page 82, of the same work, we read the following:
Insured may be regarded as the real party in interest, although he has
assigned as collateral security any judgment he may obtain.
It is also contended that the trial court erred in not declaring that in as
much as the plaintiff failed to notify the defendant corporation in writing,
of other insurance policies obtained by him, he has violated article 3 of the
conditions of the policies in question, thereby rendering these policies null
and void. Article 3 of the conditions of the policies in question prescribes:
ART. 3. Any insurance in force upon all or part of the things insured must
be declared in writing by the insured and he should cause the company to
insert or mention it in the policy, and without such requisite said policy will
be regarded as null and void, and the assured deprived of all rights of
indemnity in case of loss.
The following clause has been inserted with a typewriter in the policies:
"Subject to clauses G and A and other insurances with a special short
period attached to this policy." And attached to said policies issued by the
defendant there is a sheet of "Other insurances" with the amount and the
assurance companies in blank, which, according to the appellee,
constitutes a notification that there were other insurances existing at the
time.
In the case of Benedict vs. Ocean Insurance Co. (31 N.Y., 391-393), the
construction of the clause, "privilege for $4,500 additional insurance," was
discussed. One of the printed clauses of the policy reads as follows:
If said assured, or his assigns, shall hereafter make any other insurance
upon the same property, and shall not, with all reasonable diligence, give
notice to this corporation, and have the same indorsed on this instrument,
or otherwise acknowledged by them, in writing, this policy shall cease and
be of no further effect.
The Supreme Court of New York held that the words "Privilege for $4,500
additional insurance" made it unnecessary for the assured to inform the
insurer of any other policy up to that amount.
In the case cited the same goods insured by the defendant company were
reinsured to the amount of $4,500 in accordance with the clause "privilege
for $4,500 additional insurance;" but in the instant case it may be said that
the tobacco insured in the other companies was different from that
insured with the defendant, since the number of bales of tobacco in the
warehouse greatly exceeded that insured with the defendant and the
other companies put together. And according to the doctrine enunciated in
26 Corpus Juris, 188, "to be insurance of the sort prohibited the prior
policy must have been insurance upon the same subject matter, and upon
the same interest therein.
Furthermore, the appellant cannot invoke the violation of article 3 of the
conditions of the insurance policies for the first time on appeal, having
failed to do so in its answer; besides, as the appellee correctly contends in
his brief, Guillermo Cu Unjieng, who was then president and majority
shareholder of the appellant company, the Yek Tong Lin Fire & Marine
Insurance Co., knew that there were other insurances, at least from the
attempt to raise the insurance premium on the warehouse and the
appellee's tobacco deposited therein to 1 per centum, and it was later
reduced upon petition of the appellant itself and other assurance
companies to 0.75 per centum presented to the association of assurance
companies in the year 1927, and notwithstanding this, said appellant did
not rescind the insurance policies in question, but demanded and collected
from the appellee the increased premium.
That the defendant had knowledge of the existence of other policies
obtained by the plaintiff from other insurance companies, is specifically
shown by the defendant's answer wherein it alleges, by way of special
defense, the fact that there exist other policies issued by the companies
mentioned therein. If, with the knowledge of existence of other insurances
which the defendant deemed violations of the contract, it has preferred to
continue the policy, its action amounts to a waiver of the annulment of the
contract, in accordance with the following doctrine in 19 Cyc., 791, 792:.
FAILURE TO ASSERT FORFEITURE — IN GENERAL. — While the weight of
authority is that a policy conditioned to become void upon a breach of a
warranty is void ipso facto upon such a breach without formal proceedings
on the part of the insurer, yet it is true that such conditions are inserted for
the benefit of the insurer and may be waived, and that the insurer may
elect to continue the policy despite the breach. If it does the policy is
revived and restored. Its failure to assert a forfeiture therefore is at least
evidence tending to show a waiver thereof. Many authorities go further,
however, and hold that the failure to assert a forfeiture after knowledge of
a ground thereof will amount of itself to waiver. . . .
The fifth and sixth assignments of error refer to the quantity of tobacco in
the Soler warehouse at the time of the fire, which, according to the
appellant, did not exceed 4,930 bales. As may be seen, these assignments
of error by the appellant involved purely questions of fact, and it is for this
court to decide whether the findings of the trial court are supported by the
evidence. The judgment appealed from sets forth clearly the evidence
presented to the court in order to determine the quantity of tobacco in the
warehouse at the time of the fire. We have studied the evidence aforesaid,
are fully convinced that the court's findings are well supported by the
same. Inasmuch as it has not, in our opinion, been shown that the trial
judge overlooked any fact, which, if duly considered would have change P290,000, for which reason the appellee received P129.21, as his
the result of the case, we do not feel justified in altering of modifying his proportionate share of the tobacco saved, as shown by Exhibits UU, WW,
findings. and XX.

Finally, the appellant contends that the trial court erred in arriving at the Hence the last assignment of error is without merit.
damages that plaintiff may recover under the policies in question by the
Wherefore, the judgment appealed from is in accordance with law, and
cost price of the tobacco damaged by the fire, instead of computing the
must be, as it is hereby, affirmed, with costs against the appellant. So
same on the market price of the said tobacco at the time of the fire; and in
ordered.
declaring that the tobacco damaged was worth more than P300,000. This
error is not well taken, for it is clear that the cost price is competent
evidence tending to show the value of the article in question. And it was so
held the case of Glaser vs. Home Ins. Co. (47 Misc. Rep., 89; 93 N. Y. Supp.,
524; Abbott's Proof of Facts, 3d ed., p. 847), where it was declared that the
cost of the goods destroyed by fire is some evidence of value, in an action
against the insurance company. Exhibits L to L-20, which are invoices for
tobacco purchased by the appellee, and the testimony of the public
accountant Clemente Uson, who went over them and the rest of the
appellee's books after the fire, taken in connection with reports T and Z,
adduced as part of his testimony, show that the cost price of each bale of
tobacco belonging to the appellee, damaged by the fire, was P51.8544,
which, multiplied by 6,264, the number of bales, yields a total of over
P320,000.

The adjusters of the appellant, White & Page, in ascertaining the market
price of the plaintiff's tobacco deposited in the burnt warehouse, taking
the information furnished by the Tabacalera and by M. Pujalte, S. en C., as
a basis, thus conclude their report: "We therefore are obliged to the
conclusion that the value of the tobacco destroyed was not less than
P290,000." And, indeed, said adjusters, in behalf of the appellant,
appraised the appellee's tobacco assured and damaged by the fire at
P303,052.32, collecting from the proceeds of the sale of the tobacco saved
from the fire P3,000, the appellants share in proportion to the to the
insurance of P100,000 belonging to it, and P190,000 belonging to the other
assurance companies, and considered the appellee himself as his own
assurer in the amount of P13,052.32 which was the difference between the
total value of the tobacco damaged and the total amount of the insurance,