The case involves a dispute between a private respondent and an insurance company regarding a shipment of fishmeal that arrived damaged. The court ruled that the 'all risks' insurance policy covers all losses from accidental causes, and the private respondent, as the consignee, has an insurable interest in the cargo based on a perfected contract of sale. The court affirmed the trial court's decision, ordering the insurer to pay for the damages as there was no evidence of excluded perils causing the loss.
The case involves a dispute between a private respondent and an insurance company regarding a shipment of fishmeal that arrived damaged. The court ruled that the 'all risks' insurance policy covers all losses from accidental causes, and the private respondent, as the consignee, has an insurable interest in the cargo based on a perfected contract of sale. The court affirmed the trial court's decision, ordering the insurer to pay for the damages as there was no evidence of excluded perils causing the loss.
The case involves a dispute between a private respondent and an insurance company regarding a shipment of fishmeal that arrived damaged. The court ruled that the 'all risks' insurance policy covers all losses from accidental causes, and the private respondent, as the consignee, has an insurable interest in the cargo based on a perfected contract of sale. The court affirmed the trial court's decision, ordering the insurer to pay for the damages as there was no evidence of excluded perils causing the loss.
The case involves a dispute between a private respondent and an insurance company regarding a shipment of fishmeal that arrived damaged. The court ruled that the 'all risks' insurance policy covers all losses from accidental causes, and the private respondent, as the consignee, has an insurable interest in the cargo based on a perfected contract of sale. The court affirmed the trial court's decision, ordering the insurer to pay for the damages as there was no evidence of excluded perils causing the loss.
FACTS: Private respondent insured with Petitioner his shipment of fishmeal from Bangkok, Thailand to Manila “against all risk” under warehouse-to-warehouse terms. The shipment arrived in Manila and was unloaded, but during the discharge it was found out that 227 bags were in bad condition evidenced by the bad order certificate issued by the arrastre.
With these, the private respondent filed a claim to petitioner for the equivalent amount of the damage items. However, petitioner refused to pay the claim. Hence, private respondent initiated the complaint before the trial court. The trial court ruled in favor of private respondent and ordered petitioner to pay the amount of items damage with legal interest. With regards to the third-party complaint, the court ordered the third party defendant Compagnie Maritime Des Chargeurs Reunis and third party defendant E. Razon, Inc. are ordered to pay to the third party plaintiff jointly and severally reimbursement of the amounts paid by the third party plaintiff with legal interest from the date of such payment until the date of such reimbursement.
On appeal, petitioner contends the “all-risks” clause has a technical meaning in
insurance in that before a claim can be compensable it is essential that there must be "some fortuity," "casualty" or "accidental cause" to which the alleged loss is attributable. Likewise, petitioner alleges that private respondent has no insurable interest in the subject cargo thus the insurance policy is null and void. However, CA affirmed the decision of the trial but modified the adjudication of the third-party complaint.
ISSUE: Whether private respondent has an insurable interest in the subject cargo.
RULING: The Court ruled that an "all risks policy" should be read literally as meaning all risks whatsoever and covering all losses by an accidental cause of any kind. The terms "accident" and "accidental", as used in insurance contracts, have not acquired any technical meaning. The term "all risks" covers any loss other than a willful and fraudulent act of the insured. It is insurance against all losses attributable to external causes.
Normally, the burden of proof is with the insured to show that a loss arose from a peril but under an "all risks" policy the burden is not on the insured to prove the precise cause of loss or damage for which it seeks compensation. The insured under an "all risks insurance policy" has the initial burden of proving that the cargo was in good condition when the policy attached and that the cargo was damaged when unloaded from the vessel. An insurance policy with “all-risk clause” is consider a special insurance and covers all loses except those arising from fraud of the insured.
In the present case, there being no showing that the loss was caused by any of the excepted perils, the insurer is liable under the policy.
On the issue of private respondent’s insurable interest, the Court ruled that private respondent being the consignee of the shipment has insurable interest.
Section 13 of the Insurance Code defines insurable interest in property as every
interest in property, whether real or personal, or any relation thereto, or liability in respect thereof, of such nature that a contemplated peril might directly damnify the insured. In principle, anyone has an insurable interest in property who derives a benefit from its existence or would suffer loss from its destruction whether he has or has not any title in, or lien upon or possession of the property. Insurable interest in property may consist in (a) an existing interest; (b) an inchoate interest founded on an existing interest; or (c) an expectancy, coupled with an existing interest in that out of which the expectancy arises.
In this case, private respondent being the vendee/consignee has existing interest. His interest over the goods is based on the perfected contract of sale. The perfected contract of sale between him and the shipper of the goods operates to vest in him an equitable title even before delivery or before be performed the conditions of the sale. The perfected contract of sale even without delivery vests in the vendee an equitable title, an existing interest over the goods sufficient to be the subject of insurance.
The delivery of the goods partakes the nature of actual delivery thus the buyers assume the risk of loss and paid the insurance covering them.
