Zoliel Clavel, a general creditor of Coco Macoa, insured the latter's building for thirty million pesos,

believing that the destruction of such would render worthless any judgment he might obtain against
Coco. Is the contract of insurance valid? (10 points)

NO. As provided under Section 18 of the insurance code, no contract or policy of insurance on
property shall be enforceable except for the benefit of some person having an insurable interest in
the property insured. In this case, it appears that Zoliel Clavel's primary motivation for
insuring Coco's building was not to protect against his own financial loss but to secure a
means of enforcing a judgment against Coco. It could be considered a form of
wagering, which is generally not allowed in insurance contracts.

Therefore, the contract of insurance obtained by the insured is invalid.

II.

Mr. Curaming, a widower, owns several mansions. He is scrimpy and does not really believe in
insurance. Abram Kirth is his only son. Does Abram Kirth have insurable interest in the mansions?

(10 points)

No. As provided under Section 16 of the insurance code, a mere contingent or expectant interest
in any thing, not founded on an actual right to the thing, nor upon any valid contract for it, is not
insurable. In this case, Abram Kirth has no insurable interest to the property as the mansions are to
be considered as expectancy of inheritance.

Therefore, Abram Kirth has no insurable interest to the mansion yet.

III.

Distinguish insurable interest in life insurance and property insurance as to:

(a) amount to be insured;

L: Unlimited except in life insurance effected by creditor on life of debtor.

P: Limited to the actual value of the property

(b) when insufable interest must exist;

L: Must exist at the time the policy takes effect and need not exist thereafter

P: Must exist twice, i.e, both at the time the policy takes effect and the time of loss, but need not exist in the
period in between

(c) as to insurable interest of beneficiary; and

 L: The beneficiary need not have insurable interest over the life of the insured if the insured himself
secured the policy.
P: The beneficiary must have insurable interest over the thing insured.
(d) as 'to expectation of benefit. (10 points)

L: The expectation of benefit to be derived from the continued existence of life need not have any legal basis whatever. A
reasonable probability is sufficient without more.

P: An expectation of a benefit to be derived from the continued existence of the property insured must have a legal basis.

IV.

On February 24, 2021, while Enrique Sr. was in the hospital preparatory to heart surgery, he called his
only son Enrique Jr., and showed the latter a Last Will and Testament naming him as the sole heir to the
former's estate, including a family mansion in Doña Maria Luisa, an ultra-expensive subdivision in Cebu.
The following day, Enrique Jr. took out a fire insurance for such family mansion. One week later, Enrique
Sr. died. After his father's death, Enrique Jr. and his immediate family moved to the family mansion
which he inherited. On July 29, 2021, a fire destroyed the mansion. Is the insurer liable? (10 points)

No. As provided under Section 19 of the insurance law, an interest in property insured must exist
when the insurance takes effect, and when the loss occurs, but need not exist in the meantime. In
this case, Enrique Jr. does not have insurable interest to the property at the time he took out a fire
insurance, as it is still considered as expectancy of inheritance which is not insurable by him as
provided under Section 16 of the insurance law.

Therefore, the insurer is not liable at the contract of insurance is invalid.

V.

Sheila Mae Curdapia insured her building against fire for Eight Million Pesos on March 4, 2022 effective
for one year, and designated her kiddy crush Zoren Close as irrevocable beneficiary. On June 11, 2022,
she sold the building to Melchora Margaux for Ten Million Pesos without endorsing the fire policy. Ten
days later, the building was razed to the ground.

A. Can Sheila Mae collect the proceeds of the policy? (10 points)
No. As provided under Section 19 of the insurance law, an interest in property insured
must exist when the insurance takes effect, and when the loss occurs, but need not exist in
the meantime. In this case, Sheila Mae has no insurable interest to the property as it was
sold to Mechora at the time the building was loss to the fire.

Hence, Sheila Mae cannot collate the proceeds of the policy.

B. Can Zoren Cloise collect the insurance proceeds being an irrevocable beneficiary? Give reasons.
(10 points)
 No. As provided under Section 18 of the insurance code, no contract or policy of insurance
on property shall be enforceable except for the benefit of some person having an insurable
interest in the property insured. In this case, Zoren has no insurable interest to the property
and does not qualify to be a beneficiary.

Hence, Zoren cannot collect the insurance proceeds even if designated as irrevocable
beneficiary.

C. Can Melchora Margaux claim the insurance proceeds? (10 points)

No.

VI.

On October 23, 2020, Marupok insured the life of her debtor Marikit, for Php 1,500,000.00 for a period
of one year. At the time she took out the policy, Marikit's indebtedness was Ph 500,000.00 payable on
October 23, 2021. Marikit paid in full her debt with Marupok on August 31, 2021. Marikit died on
Septerhber 29, 2021.

A. Can Marupok claim the insurance proceeds? (10 points)

No. As provided under the law, If at the time of the death of the debtor the whole debt has
already been paid, the creditor can no longer recover on the policy because the principle of
indemnity applies. In this case, Marikit has already paid his debt before his death. Therefore
Marupok cannot claim the insurance proceeds.

B. Can the heirs of Marikit claim the proceeds from the insurer.
No. Property insurance contracts are personal contracts between the insured and the insurer.
Heirs of Marikit are not party to the contract, hence cannot claim the insurance proceeds.

VII

Clint Edward Souberous, owner of a condominium unit, insured the same against fire with Eternity
Insurance for 20M, and made the loss payable to his brother Clemente, irrevocably. In case of loss by
fire of the said condominium, who may recover on the fire insurance policy? (10 points)

Clint Edward, as provided under Section 18 of the insurance code, no contract or policy of insurance
on property shall be enforceable except for the benefit of some person having an insurable interest
in the property insured. In this case, Clemente has no existing interest to the property and disqualify
him as beneficiary of the insurance contract.

Therefore, Clint Edward can recover the proceeds of the insurance policy