Golangco's Insurable Interest

21. TRADERS INSURANCE V. GOLANGO 11.
Trader’s insurance refused to pay the insurance for the rent

G.R. No. L-6442. September 21, 1954 averring that Golangco has no insurable interest
12. DEFENDANT’S CONTENTIONS:
Petitioner: Traders Insurance & Surety Co. Under section 49 of the Insurance Law, a policy of insurance must
Respondent: Juan Golangco specify the interest of the insured in the property insured, if he is not the
TOPIC: Insurable interest in property insurance absolute owner thereof, is not meritorious because it was the defendant,
DOCTRINE: Both at the time of the issuance of the policy and at the not plaintiff, who prepared that policy, and it cannot take advantage of
time of the fire, plaintiff Golangco was in legal possession of the its own acts to plaintiff’s detriment; and, in any case, this provision was
premises, collecting rentals from its occupant. It seems plain that if the substantially complied with by plaintiff when he made a full and clear
premises were destroyed as they were, by fire, Golangco would be, as he statement of his interests to defendant’s manager.
was, directly damnified thereby; and hence he had an insurable interest
therein. ISSUE: Whether Golangco had any insurable interest therein when the
policy was issued and when the fire occurred
FACTS:
1. Tomas Lianco and the Archbishop entered into a contract of HELD: YES
lease on a parcel of land owned by church .  Sec. 13 of the Insurance Code- Every interest in the property,
2. As lessee, Lianco erected a building on the leased portion of the whether real or personal, or any relation thereto, or liability in
church’s land. respect thereof of such nature that a contemplated peril might
3. Lianco transferred ownership of this building to Kaw Eng directly damnify the insured, is an insurable interest.
Si,who later transferred the same to Golangco.  Both at the time of the issuance of the policy and at the time of
4. Transfers were made without the consent of the Archbishop the fire, plaintiff Golangco was in legal possession of the
5. The Archbishop filed an ejectment case against Lianco, who premises, collecting rentals from its. It seems plain that if the
appears to be occupants of the premises building with others premises were destroyed — as they were — by fire, Golangco
paying rent to Golangco. would be, as he was, directly damnified thereby; and hence he
6. The right of Golangco to receive rent on the building was had an insurable interest therein (section 12, Insurance Law).
judicially recognized in a case decided between Lianco and  "Defendant’s contrary contentions are without merit. The
others occupying the premises pursuant to a compromise contract between Lianco and the Archbishop only forbade Lianco
agreement. from transferring ’his rights as LESSEE’ but the contracts
7. The Archbishop did not exercise his option to question Golangco Lianco made in favor of Kaw Eng Si and plaintiff Golangco did
’s rights as lessee not transfer such rights; and hence no written consent thereto
8. April 7,1949: Golangco applied for fire insurance with Trader’s was necessary. At worst, the contract would be voidable, but not
Insurance and Surety Co. a void contract, at the option of the Archbishop; but this would
9. Fire insurance policy states: "that all insurance covered under not deprive Golangco of his insurable interest until such option
said policy, includes the 'rent or other subject matter of were exercised; and it does not appear that it was ever
insurance in respect of or in connection with any building or any exercised.
property contained in any building"  "The ejectment case filed by the Archbishop against Lianco did
10. June 5, 1949: the building premises was burned so Golangco not remove nor destroy plaintiff’s insurable interest: first,
requested Trader’s Insurance to pay the insurance amount of because plaintiff was not a party thereto and cannot be bound
10,000 including the amount of rent P1,100 monthly. thereby; and second, because the judgment of the Municipal
Court, at least as late as February 14, 1950, had not been
executed so far as possession of the premises were concerned. In
fact, not even garnishments were issued against Melitona
Estrella, So Eng Si (her husband) or plaintiff Golangco, the
actual and legal possessors of the premises ; so that, as far as
plaintiff Golangco was concerned, his right to the premises and
to the rentals thereon continued to exist on June 5, 1949 when
the fire took place."
FALLO (It’s in Spanish )

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21. TRADERS INSURANCE V. GOLANGO 11.

Trader’s insurance refused to pay the insurance for the rent

FALLO (It’s in Spanish )

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