same year, that no other insurance should be admitted upon the property thereby assured

95 STA. ANA V. COMMERCIAL UNION INSURANCE without the consent of said companies duly given by endorsement,
 Moreover, Clause 3 of the Filipinas policy provided that any outstanding insurance
G.R. No. L-32889, 20 Nov. 1930 upon the whole or a portion of the objects thereby assured must be declared by the
insured in writing and he must cause the company to add or insert it in the policy,
without which such policy shall be null and void, and the insured will not be entitled to
FACTS: indemnity in case of loss

1. In the year 1923, Ulpiano Santa Ana built a house of strong materials with a galvanized
iron. PETITIONERS (Sta. Ana): maintains that he gave the required notice to all the insurance
2. Sta Anta took out the following policies: companies through their agents/sub-agents.
a. P3,000 fire insurance policy on the house with Phoenix Assurance Company
b. P6,000 policy with Guardian Assurance Company for a period of 1 year until
4:00pm of 1 Oct. 1926 ISSUE: Whether the policy executed by the defendant companies are null and void due to the
3. Santa Ana mortgaged her house to Garcia for P5,000 for 2 years. The policies issued by
lack of notice as regards existing co-insurances. -- YES
Phoenix and Guardian were endorsed to Garcia
4. Dec. 16, 1925: Sta. Ana reinsured the house defendant companies, the Globe and Rutgers
Fire Insurance Company, and the Commercial Union Assurance Company, through their
common agent, the Pacific Commercial Company, for the amount of P3,000 each. HELD:
a. to be effective for one year from the aforementioned date until 4 o'clock in the
afternoon of December 16, 1926  The Supreme Court ruled that Sta Ana’s defense that she gave notices to the
5. Sept. 20, 1926, Ulpiano Santa Ana took out another insurance policy on the house in companies’ names agents and sub-agents has been contradicted by all the persons mentioned,
question for P6,000 in the "Filipinas, Compañía de Seguros," and this deprives his allegations of probative force, especially considering that such advices
6. About 3:00 am of Oct. 1, 1926, 12 hours before the expiration of the policy by Phoenix or notices, so basic and essential to the existence and validity of the policies, must be
and Guardian, a fire broke out. given in writing as required in the note attached to the four policies above mentioned,
7. Ulpiano Santa Ana gave notice in due time of the loss to each and every one of the and must be endorsed upon each of them.
companies in which he had insured the house and demanded payment of the respective
policies
8. The assurance companies refused payment on the following grounds:
So that in case of necessity, as in the instant one, when a loss occurs, the insured may
a. that the claim of P21,000 (total of all insurance policies) filed by him was
clearly show that he has fulfilled this indispensable requisite, since all companies, to which
fraudulent, being in excess of the real value of the insured property
b. that none of said companies had been informed of the existence of the other people apply for insurance upon property already assured, have an interest in knowing what
policies in the other companies, and other policies issued by other companies the insured already holds, for the purpose of
c. that the fire was intentional knowing just what interest the applicant has in the preservation of the property, and the care
9. Sta Ana filed a case against the insurance companies and a judgment was rendered and precaution to be taken for the prevention of loss.
absolving the latter from paying the proceeds.
10. Both Sta Ana and Garcia appealed
Without deciding whether notice of other insurance upon the same property must be
NOTE: The trial court pointed out in its decision that – given in writing, or whether a verbal notice is sufficient to render an insurance valid which
requires such notice, whether oral or written, we hold that in the absolute absence of such
 It has been provided in English and Spanish in notices attached to the insurance policies notice when it is one of the conditions specified in the fire insurance policy, the policy is null
issued by Phoenix, Guardian, Globe and Commercial, upon the 19th of December of the and void.
96 Ang Giok Chip v. Springfield Fire & Marine Insurance Co. "Any express warranty or condition is always a part of the policy, but, like any other part of
an express contract, may be written in the margin, or contained in proposals or documents
No. 33637. December 31, 1931. Malcolm, J.
expressly referred to in the policy, and so made a part of it." 

FACTS:
Two of well recognized doctrines.
1. Ang Giok Chip (doing business under the name and style of Hua Bee Kong Si) owns
1. It is well settled that a rider attached to a policy is a part of the contract, to the same
a warehouse in Manila.
extent and with like effect as it actually embodied therein.
2. The contents of the warehouse were insured with three insurance companies. One
2. It is equally well settled that an express warranty must appear upon the face of the
insurance policy, in the amount of P10,000 was taken out with the Springfield Fire &
policy, or be clearly incorporated therein and made a part thereof by explicit
Insurance Co.
reference, or by words clearly evidencing such intention.
3. Securely pasted on the left hand margin of the face of the policy are five warranties
and special clauses. One of them is warranty Fi.
4. While the policy was in force, the warehouse was destroyed by fire. The rider, warranty F, is contained in the policy itself, because by the contract of insurance
5. Ang Giok Chip instituted action in CFI-Manila against Springfield to recover a agreed to by the parties it is made to form a part of the same, but is not another instrument
proportional part of the loss (P8,170.59). signed by the insured and referred to in the policy as forming a part of it.
6. Springfield interposed a special defense, according to them, there was a violation of
Warranty F. Warranty F provides for the allowable amount of hazardous goods which
might be stored in the insured building.
7. The trial judge ruled against Springfield and gave judgment in favor of Ang Giok It is admitted that the policy before us was accepted by the plaintiff. The receipt of this policy
Chip for the sum of P8,188.74. by the insured without objection binds both the acceptor and the insured to the terms thereof.
8. Springfield appealed. The insured may not thereafter be heard to say that he did not read the policy or know its
terms, since it is his duty to read his policy and it will be assumed that he did so.

Note: It was not mention in the cases, but I think Ang Giok Chip’s defense is that warranty F Warranty F. It is hereby declared and agreed that during the currency of this policy no
should not apply, so he can claim the proceeds. hazardous goods be stored in the Building to which this insurance applies or in any building
communicating therewith, provided, always, however, that the Insured be permitted to stored
a small quantity of the hazardous goods specified below, but not exceeding in all 3 per cent of
ISSUE: Whether a warranty referred to in the policy as forming part of the contract of the total value of the whole of the goods or merchandise contained in said warehouse, viz; . ..
insurance and in the form of a rider to the insurance policy, is null and void for not complying
with the Philippine Insurance Act- NO
97 Young v. Midland Textile

HELD:
Sec. 65 of the Insurance Act provides that, "Every express warranty, made at or before the
execution of a policy, must be contained in the policy itself, or in another instrument signed
by the insured and referred to in the policy, as making a part of it."
98 AMERICAN HOME ASSURANCE V TANTUCO WARRANTED that during the currency of this Policy, Fire Extinguishing
Appliances as mentioned below shall be maintained in efficient working
FACTS: order on the premises to which insurance applies:
- PORTABLE EXTINGUISHERS
1. Respondent Tantuco Enterprises, Inc. is engaged in the coconut oil milling and - INTERNAL HYDRANTS
refining industry. - EXTERNAL HYDRANTS
2. It owns two oil mills. Both are located at its factory compound at Iyam, Lucena City. - FIRE PUMP
a. Separately covered by fire insurance policies issued by petitioner American - 24-HOUR SECURITY SERVICES
Home Assurance Co., Philippine Branch. BREACH of this warranty shall render this policy null and void and the
b. The first oil mill was insured for three million pesos  Company shall no longer be liable for any loss which may occur.
c. The new oil (Second) mill was insured for six million pesos
d. Official receipts indicating payment for the full amount of the premium were ISSUE: WON the insured violated the warranties in the policy?
issued by the petitioner's agent. HELD: No.
3. A fire that broke out in the early morning of September 30,1991 gutted and RATIO:
consumed the new oil mill.
4. Tantuco immediately notified the insurer of the incident, so the latter sent its WARRANTIES
appraisers.
5. The insurer rejected Tantuco’s claim for insurance proceeds on the ground that no  The warranty did not require respondent to provide for all the fire extinguishing
policy was issued by it covering the burned oil mill. appliances enumerated therein. Additionally, we find that neither did it require that
a. It stated that the description of the insured establishment referred to another the appliances are restricted to those mentioned in the warranty. In other words, what
building. the warranty mandates is that respondent should maintain in efficient working
b. The policy only extends to insurance coverage to oil mill under Building No. condition within the premises of the insured property, fire fighting equipments such
5, whilst the affected oil mill was under Building No. 14. as, but not limited to, those identified in the list, which will serve as the oil mills first
6. A complaint for specific performance and damages was consequently instituted by line of defense in case any part of it bursts into flame.
the Tantuco with the RTC.  To be sure, respondent was able to comply with the warranty. Within the vicinity
7. LC: Ruled that the insurer s liable on the insurance policy. of the new oil mill can be found the following devices: numerous portable fire
8. Tantuco assailed this judgment before the CA. extinguishers, two fire hoses, fire hydrant, and an emergency fire engine. All of these
9. CA: upheld the LC. MR was denied for lack of merit. Hence, this petition. equipments were in efficient working order when the fire occurred.
10. Insurer’s arguments:  It ought to be remembered that not only are warranties strictly construed
a. The one insured was clearly described in the policy; this specific boundary against the insurer, but they should, likewise, by themselves be reasonably
description clearly pertains, not to the burned oil mill, but to the other mill.  interpreted. That reasonableness is to be ascertained in light of the factual conditions
b. Despite the fact that the policy in question was issued way back in 1988, prevailing in each case. Here, we find that there is no more need for an internal
Tantuco apparently did not call petitioners attention with respect to the hydrant considering that inside the burned building were: (1) numerous
misdescription. portable fire extinguishers, (2) an emergency fire engine, and (3) a fire hose
c. Tantuco is barred  by the parole evidence rule from presenting evidence which has a connection to one of the external hydrants.
(other than the policy in question) of its self-serving intention that it intended
really to insure the burned oil mill, just as it is barred by estoppel from OTHER ISSUES:
claiming that the description of the insured oil mill in the policy was wrong. POLICY CONSTRUCTION: In favor of the insured
d. Tantuco violated the express terms of the Fire Extinguishing Appliances
Warranty:  The misdescription in the policy, it is beyond dispute, that what the parties manifestly
intended to insure was the new oil mill. This is obvious from the categorical
statement embodied in the policy, extending its protection:
 o On machineries and equipment with complete accessories usual to a coconut
oil mill including stocks of copra, copra cake and copra mills whilst
contained in the new oil mill building, situate at UNNO. ALONG
NATIONAL HIGH WAY, BO. IYAM, LUCENA CITY UNBLOCKED.
 If the parties really intended to protect the first oil mill, then there is
no need to specify it as new. 99 QUA CHEE GAN V. LAW UNION AND ROCK INSURANCE
 It would be absurd to assume that respondent would protect its first oil mill for
different amounts and leave uncovered its second one. The first oil mill is already 1. Qua owned 4 warehouses in Albay.
covered under a different policy. 2. The warehouses including their contents, had been insured with Law Union.
3. A fire of undetermined origin broke out and gutted and completely destroyed 3 Bodegas
 The imperfection in the description of the insured oil mills boundaries can be
with the merchandise therein.
attributed to a misunderstanding between the petitioner’s general agent, Mr. Alfredo
4. Qua informed the insurer and fire adjusters investigated the premises.
Borja, and its policy issuing clerk, who made the error of copying the boundaries
5. Law Union declined to pay the policy claiming violation of warranties and conditions and
of the first oil mill when typing the policy to be issued for the new one.
that the fire had been deliberately caused by the insured or by other persons in
PAROLE EVIDENCE connivance with him.
6. Qua and others were indicted for the crime of arson. Acquitted.
 The present case falls within one of the recognized exceptions to the parole 7. TC on civil case: In favor of Qua.
evidence rule. 8. Law Union: Policies should had been voided by TC for breach of warranty on one of the
 Under the Rules of Court, a party may present evidence to modify, explain or add to policy riders:
the terms of the written agreement if he puts in issue in his pleading, among others, a. Presence of fire hydrants depending on the area of the warehouse.
its failure to express the true intent and agreement of the parties thereto. b. They should be supplied with water by a pumping engine.
o Thus, while the contract explicitly stipulated that it was for the insurance of c. Qua should have 11 fire hydrants but he only had 2.
the new oil mill, the boundary description written on the policy concededly
pertains to the first oil mill. This irreconcilable difference can only be ISSUE: Whether Qua can claim for the value of the policy. YES.
clarified by admitting evidence aliunde, which will explain the
imperfection and clarify the intent of the parties. RATIO:
 Law Union is barred to claim violation of the fire hydrant warranty because it knew that
ESTOPPEL: Insured not estopped.
the number of hydrants demanded never existed from the beginning but it still issued the
 Evidence on record reveals that respondents operating manager, Mr. Edison Tantuco, policies and received premiums for it.
notified Mr. Borja (the petitioners agent with whom respondent negotiated for the  Law Union agents inspected the premises before issuing the policy. This was a
contract) about the inaccurate description in the policy. However, Mr. Borja assured prerequisite for fixing the discount on the premiums since discount depended on the
Mr. Tantuco that the use of the adjective new will distinguish the insured number of hydrants available.
property.  The contract of insurance is one of perfect good faith not for the insured alone, but
equally for the insurer. In fact, it is more so for the latter, since its dominant bargaining
position carries with it stricter responsibility.
 By reason of the exclusive control of the insurance company over the terms and
phraseology of the insurance contract, ambiguity must be strictly interpreted against the
insurer and liberally for the insured.
o Law Union required maintenance of a trained fire brigade of 20 men. This
was organized by Qua but not permanently maintained. Court: It would be
unreasonable to expect him to maintain a separate unit for firefighting alone.
 o
Law Union claims that in the Hemp Warranty, storage of gasoline not privately owned vehicle might not fall within the terms of the common carrier insurance
allowed. policy.
o “Gasoline” is not specifically mentioned.  This is a case where the doctrine of estoppel undeniably calls for application. It is now
o Law Union used “oils” (animal/vegetable/mineral having a flash point below beyond question that where inequitable conduct is shown by an insurance firm, it is
300F) which meant “lubricants” and not gasoline or kerosene. "estopped from enforcing forfeitures in its favor, in order to forestall fraud or imposition
o Not everyone is in a position to understand flash point of 300F. on the insured."
o The gasoline kept was no more than a supply for the vehicles of the  After petitioner had led the insured to believe that he could qualify under the common
company. carrier liability insurance policy, and to enter into contract of insurance paying the
100 FIELDMEN’S INSURANCE v. VDA DE SONGCO ET AL premiums due, it could not, thereafter, in any litigation arising out of such representation,
be permitted to change its stand to the detriment of the heirs of the insured.
 Since some of the conditions contained in the policy Issued by the defendant-appellant
were impossible to comply with under the existing conditions at the time and
FACTS: 'inconsistent with the known facts,' the insurer 'is estopped from asserting breach of such
1. Songco, a man of scant education who only finished 1 st grade, owned a private jeepney conditions.'
(Plate No. 41-289).  The injured parties, for whose hospital and medical expenses the defendant company was
2. He was induced by Fieldmen’s Insurance Co.-Pampanga agent Sambat to apply for a being made liable, were passengers of the jeepney at the time of the occurrence, and
Common Carrier’s Liability Insurance Policy for the jeepney. Rodolfo Songco, for whose burial expenses the defendant company was also being made
3. Songco’s other son testified that when his father was induced to insure the policy he told liable was the driver of the vehicle in question. Except for the fact, that they were not
Sambat that their vehicle was an “owner” private vehicle and not for passengers. Sambat fare-paying passengers, their status as beneficiaries under the policy is recognized
said that it could still be insured because their company is not owned by the government. therein.
Thus, they could do whatever they want whenever they believe a vehicle is insurable.  We have no choice but to recognize the monetary responsibility of petitioner Fieldmen's
4. Upon paying an annual premium, the insurer issued the policy for a period of 1 year, Insurance Co., Inc. It did not succeed in its persistent effort to avoid complying with its
extended to another year. This time, the private jeepney then carried a different plate obligation in the lower court and the Court of Appeals. Much less should it find any
number. receptivity from us for its unwarranted and unjustified plea to escape from its liability.
5. During the effectivity of the policy, while being driven by his son, the jeep collided with
a car. Songco and his son died.
6. His heirs claimed for the policy.
7. Fieldmen’s Insurance denied liability saying that what was insured was a private vehicle
and not a common carrier.

ISSUE: Whether the heirs may claim the policy. YES.

101 PIONEER INSURANCE vs. OLIVA YAP, represented by attorney-in-fact, CHUA

 The contract of insurance is one of perfect good faith (uberrima fides) not for the insured 1. Yap owns a store in a 2-storey building at Juan Luna, Manila, where ishe sold shopping
alone, but equally so for the insurer; in fact, it is more so for the latter, since its dominant bags and footwear.
bargaining position carries with it stricter responsibility. 2. Apr 19, 1962, Yap took out Fire Insurance Policy (first policy) from Pioneer Insurance
 The insurer knew all along that the insured owned a private vehicle and not a common with a face value of P25,000 covering her stocks and office furniture and fixtures. Among
carrier. Its agents even discounted the fears of the latter, not once but twice, that his the conditions in the policy executed by the parties are the following:
  The Insured shall give notice to the Company of any insurance/s already effected,  Contrary to the assertion of the Pioneer, the Great American policy was not
or which may subsequently be effected, covering any of the property hereby substituted by the Northwest policy.
insured, and unless such notice be given and the particulars of such  Pioneer can be considered to have waived the formal requirement of indorsing
insurance/s be stated in, or endorsed on this Policy by or on behalf of the the policy of co-insurance since there was absolutely no showing that it was not
Company before the occurrence of any loss or damage, all benefits under aware of said substitution and preferred to continue the policy. Even assuming
this Policy shall be forfeited. that Pioneer did not indorse the Federal policy, there is no question that the same
 It is understood that, except as may be stated on the face of this policy there is no was only a substitution and did not in any way increase the amount of the
other insurance on the property hereby covered and no other insurance is allowed declared co-insurance. In other words, there was no increase in the risk assumed
except by the consent of the Company endorsed hereon. Any false declaration or by Pioneer.
breach or this condition will render this policy null and void. ISSUE: WON Pioneer Insurance should be absolved from liability on account of any
3. At the time of the insurance abovementioned (first policy), an insurance policy for violation by Yap of the co-insurance clause therein? YES. CA is wrong.
P20,000 issued by the Great American Insurance covering the same properties was noted RATIO:
on said policy as co-insurance. Parties executed an endorsement on first policy, stating: 1. There was a violation by Yap that resulted in the avoidance of Pioneer’s liability.
 It is hereby declared and agreed that the co-insurance existing at present under 2. The insurance policy for P20,000.00 issued by the Great American covering the same
this policy is as follows: P20,000.00 — Northwest Ins., and not as originally properties and duly noted on the first policy as co-insurance, ceased, by agreement of the
stated. parties to be recognized by them as a co-insurance policy.
 Except as varied by this endorsement, all other terms and conditions remain 3. CA says that the Great American policy was substituted by the Federal policy for the
unchanged. same amount, and because it was a mere case of substitution, there was no necessity for
4. On Sep 26, Yap took out another fire insurance policy for P20,000 covering the same its endorsement on first policy.
properties, this time from the Federal Insurance, which such policy was procured without 4. This finding suffers from several flaws.
notice to and the written consent of Pioneer and, therefore, was not noted as a co- 5. There is no evidence to establish and prove such a substitution.
insurance in the first policy. 6. The endorsement quoted above shows the clear intention of the parties to recognize, on
5. At dawn on Dec 19, a fire broke out in the building housing Yap's store, and the said the date the endorsement was made, the existence of only one co-insurance, and that is
store was burned. the Northwest policy. The finding of CA that the Great American policy was substituted
6. Yap filed an insurance claim, but was denied by Pioneer on the ground of "breach and/or by the Federal policy is unsubstantiated by the evidence and is grounded entirely on
violation of any and/or all terms and conditions" of its policy. speculation, not binding on SC.
7. Yap filed with CFI-Manila the present complaint, asking for payment of the face value of 7. CA considered Pioneer to have waived the formal requirement of endorsing the policy of
her policy. co-insurance "since there was absolutely no showing that it was not aware of said
8. In its answer, Pioneer alleged that no property belonging to Yap and covered by the substitution and preferred to continue the policy." The fallacy of this argument is that,
insurance policy was destroyed by the fire; that Yap's claim was filed out of time; and contrary to Sec1, R131 of Rules of Court, which requires each party to prove his own
that Yap took out an insurance policy from another insurance company without its allegations.
knowledge and/or endorsement, in violation of the express stipulations in its policy, 8. Yap cites Gonzales vs. Yek Tong Insurance to justify the assumption but in that case,
hence, all benefits accruing therefrom were deemed forfeited. unlike here, there was knowledge by the insurer of violations of the contract, to wit: "If,
9. CFI ruled in favor of Yap; and its judgment was affirmed by CA. with the knowledge of the existence of other insurances which the defendant deemed
10. CA: Yap has not violated the other insurance clause of the policy that would justify violations of the contract, it has preferred to continue the policy, its action amounts to a
Pioneer to avoid its liability. waiver of the annulment of the contract"
 It appears on the face of the policy that a co-insurance in the amount of P20,000 9. A waiver must be express. If it is to be implied from conduct mainly, said conduct
was secured from the Great American and was declared by Yap and recognized must be clearly indicative of a clear intent to waive such right.
by Pionneer. This was later on substituted for the same amount and secured by 10. By the plain terms of the policy, other insurance without the consent of petitioner
the Federal Insurance Company. would ipso facto avoid the contract. It required no affirmative act of election on the part
 Soon Poon declared that the Great American policy was cancelled because of the of the company to make operative the clause avoiding the contract, wherever the
difference in the premium and the same was changed for that of the Federal. specified conditions should occur.
11. The validity of a clause in a fire insurance policy to the effect that the procurement of 102 Prudential Guarantee and Insurance Inc. vs. Trans-Asia Shipping Lines, Inc.
additional insurance without the consent of the insurer renders ipso facto the policy void
is well-settled: (US cases) G.R. No. 151890             June 20, 2006
 In Milwaukee Lumber, v. Gibson, the court said: “the rule that a clause in a policy to Topic: Warranties
the effect that the procurement of additional insurance without the consent of the
insurer renders the policy void is a valid provision.” Facts:
 Additional insurance, unless consented to, or unless a waiver was shown, ipso
facto avoided the contract, and the fact that the company had not, after notice of such Trans-Asia is the owner of the vessel M/V Asia Korea. Prudential insured the vessel for
insurance, cancelled the policy, did not justify the legal conclusion that it had elected loss/damage for the sum of P40M, from July 1, 1993 up to July 1, 1994. While the policy was
to allow it to continue in force. (Johnson vs. American Fire Ins) in force, a fire broke out while M/V Asia Korea was undergoing repairs at the port of Cebu.
12. In General Insurance vs. Ng Hua, SC in absolving the insurer from liability under the Trans-Asia filed its notice of claim for damage sustained by the vessel. Prudential hired hired
policy, held: Richard Hogg International (Phil.) as the adjustrr to determine the damage.
 Considering the terms of the policy which required the insured to declare other
insurances, the statement in question must be deemed to be a statement Prudential advanced the payment of P3M. But subsequently, Prudential denied Trans-Asia’s
(warranty) binding on both insurer and insured, that there were no other claim for allegedly being in breach of the warranty, referred to as "WARRANTED VESSEL
insurance on the property. CLASSED AND CLASS MAINTAINED." Accordingly, Prudential requested the return of
 The annotation then, must be deemed to be a warranty that the property was not the P3M
insured by any other policy. Violation thereof entitled the insurer to rescind.
Trans-Asia then filed a Complaint for Sum of Money against PRUDENTIAL with the RT,
 Furthermore, even if the annotations were overlooked the insurer would still be free
wherein it sought the amount of P8.3M from Prudential, alleging that the same represents the
from liability because there is no question that the policy issued has not been stated
in nor endorsed on policy of defendant. And as stipulated in the policy "all benefit balance of the indemnity due upon the insurance policy in the total amount of P11.39M.
under this policy shall be forfeited. Prudential’ defense was that Trans-Asia was in breach of the warranty attached to the
13. The purpose of said requirement in the policy is to prevent over-insurance and thus avert insurance policy.
the perpetration of fraud. The public, as well as the insurer, is interested in preventing the
situation in which a fire would be profitable to the insured. RTC ruled in favor of Prudential b/c Trans-Asia failed to prove compliance of the terms of
14. According to J. Story: "The insured has no right to complain, for he assents to comply the warranty, the violation thereof entitled Prudential to rescind the contract.
with all the stipulation on his side, in order to entitle himself to the benefit of the contract,
which, upon reason or principle, he has no right to ask the court to dispense with the CA reversed the RTC ruling, holding that Prudential, as the party asserting the non-
performance of his own part of the agreement, and yet to bind the other party to compensability of the loss had the burden of proof to show that Trans-Asia breached the
obligations, which, but for those stipulation would not have been entered into."   warranty, w/c burden it failed to discharge.
15. In view of the above conclusion, We deem it unnecessary to consider the other defenses
interposed by petitioner. Judgment of CA is reversed and set aside, and Pioneer absolved Both parties’ MR denied by CA. Hence, this consolidated petitions.
from all liability under the policy.
Issue: w/n Trans-Asia was in breach of the policy warranty thereby absolving Prudential
from any liability
Held: No. Prudential failed to establish that Trans-Asia violated and breached the policy
condition on WARRANTED VESSEL CLASSED AND CLASS MAINTAINED
FIRST, WHAT KIND OF WARRANTY IS THIS [only if madam asks]
Class warranty. It must be entered in the classification society. A classification society is an
organization w/c sets certain standards for a vessel to maintain in order to maintain their
membership in the classification society. So, if they failed to meet that standard, they are copy of the certification specifying that the insured vessel "M/V Asia Korea" was CLASSED
considered not members of that class, and thus breaching the warranty that requires them to AND CLASS MAINTAINED. Prudential posits that it came to know of the breach by Trans-
maintain membership or to maintain their class on that classification society. And it is not Asia of the subject warranty clause only in April 1997. On the same date, Prudential sent
sufficient that the member of this classification society is such at the time of a loss. Their Trans-Asia a letter of denial.
membership must be continuous for the whole length of the policy such that during the
SC is not impressed. There can be no clearer intention of the waiver of the alleged breach
effectivity of the policy, their classification is suspended, and then thereafter, they get
than the renewal of the policy insurance granted by Prudential to Trans-Asia issued in the
reinstated, that again is still a breach of the warranty that they maintained their class. Here,
years 1994 and 1995, respectively.
the classification society is Bureau Veritas. Bureau Veritas is a classification society
recognized in the marine industry.  Prudential’s argument is made even more credulous by lack of proof to support its allegation
that the renewals of the policies were taken only after a request was made to Trans-Asia to
ON THE SUBSTANCE
furnish them a copy of the certificate attesting that "M/V Asia Korea" was CLASSED AND
The party w/c alleges a fact as a matter of defense has the burden of proving it. Prudential, as CLASS MAINTAINED. Notwithstanding Prudential’s claim that no certification was issued
the party w/c asserted the claim that Trans-Asia breached the warranty in the policy, has the to that effect, it renewed the policy, thereby, evidencing an intention to waive TRANS-
burden of evidence to establish the same. ASIA’s alleged breach. Clearly, by granting the renewal policies twice and successively after
the loss, the intent was to benefit the insured, Trans-Asia, as well as to waive compliance of
Prudential was not successful in discharging the burden of evidence that Trans-Asia breached
the warranty.
the subject policy condition on CLASSED AND CLASS MAINTAINED.
Prudential through the Senior Manager of its Marine and Aviation Division, made a
categorical admission that at the time of the procurement of the insurance contract in 1993,
Trans-Asia’s vessel, "M/V Asia Korea" was properly classed by Bureau Veritas. Thus, it
becomes incumbent upon Prudential to show evidence that the status of Trans-Asia as being
properly CLASSED by Bureau Veritas had shifted in violation of the warranty. Prudential
failed to support the allegation.
The lack of a certification in Prudential’s records to the effect that M/V Asia Korea was
CLASSED AND CLASS MAINTAINED at the time of the occurrence of the fire cannot be
tantamount to the conclusion that Trans-Asia in fact breached the warranty. It was likewise 103 GENERAL INSURANCE v. NG HUA
the responsibility of the average adjuster, Richards Hogg International (Phils.), Inc., to secure
a copy of such certification. 1. General Insurance issued an Insurance Policy insuring the stock in trade of the Central
Pomade Factory owned by Ng against fire.
Assuming arguendo that Trans-Asia violated the policy condition on WARRANTED a. Condition in the Policy: Unless a notice of insurance already effected or
VESSEL CLASSED AND CLASS MAINTAINED, Prudential made a valid waiver of the subsequently effected be given and the particulars be stated in or endorsed in the
same. Policy by or on behalf of the Company before the occurrence of any loss damage,
all benefits under this Policy shall be forfeited.
After the loss, Prudential renewed the insurance policy of Trans-Asia for 2 consecutive years, 2. The next day, Pomade Factory burned.
from 01 July 1994 to 01 July 1995, and then again until 01 July 1996. This renewal is deemed 3. Ng claimed indemnity from General Insurance.
a waiver of any breach of warranty. 4. Policy covered damages up to P10k but after some negotiations, the adjustment company,
Ng reduced the claim to P5k.
Prudential avers that the subsequent policies were issued only on 1 July 1994 and 3 July
5. General Insurance refused to pay because the action was not filed on time, violation of
1995, respectively, prior to the time it made a request to Trans-Asia that it be furnished a warranty, submission of fraudulent claim and failure to pay the premium.
 a. The face of the policy bore the annotation: “Co-Insurance Declared – NIL”
b. But Ng obtained a fire insurance with General Indemnity for the same period.
6. CA: No violation of the above clause inasmuch as co-insurance exists when a condition
of the policy requires the insured to bear ratable proportion of the loss when the value of
the insured property exceeds the face value of the policy. Hence, no co-insurance in this
case.
7. Ng Hua alleges "actual knowledge" on the part of General Insurance of the fact that he
had taken out additional insurance with General Indemnity.

ISSUE: Whether there is co-insurance. YES.

RATIO:
 Considering the terms of the policy which required the insured to declare other
insurances, the statement in question must be deemed to be a statement (warranty)
binding on both insurer and insured, that there were no other insurance on the property.
 Remember it runs "Co- Insurance declared"; emphasis on the last word. If "Co-
insurance" means what the Court of Appeals says, the annotation served no purpose. It
would even be contrary to the policy itself, which in its clause No, 17 made the insured a
co-insurer for the excess of the value of the property over the amount of the policy.
 The annotation then, must be deemed to be a warranty that the property was not insured
by any other policy.
 even if the annotation were overlooked, the defendant insurer would still be free from
liability because there is no question that the policy issued by General Indemnity has not
been stated in nor endorsed on Policy No. 471 of defendant.
 Ng does not say when such “knowledge” was acquired or imparted. If General Insurance
knew before issuing its policy or before the fire, such knowledge might overcome the
insurer's defense.
 this concealment and violation was expressly set up as a special defense in the answer.
Yet plaintiff did not, in avoidance, reply nor assert such knowledge. And it is doubtful
whether evidence on the point would be admissible under the pleadings.
 Violation of a warranty that there were no other insurances on the property insured
entitles the insurer to rescind.
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