TRADERS INSURANCE & SURETY CO vs. JUAN GOLANGCO Y OTRA [Sep 21, 1954, En Banc G.R. No.

L-6442] Facts: Tomas Lianco and the Archbishop ( no name indicated) entered into a contract of lease on a parcel of land owned by church . As lessee, Lianco erected a building on the leased portion of the churchs land. Lianco later transferred ownership of this building to Kaw Eng Si, who later transferred the same to Golangco. This transfers by Lianco of his right to lease and the buildingownership were without consent of the Archbishop. The Archbishop filed an ejectment case against Lianco, who appears to be occupants of the premises building with others paying rent to Golangco. This right of Golangco to receive rent on the building was judicially recognized in a case decided between Lianco and some others occupying the premises pursuant to a compromise agreement. At the moment, the Archbishop did not exercise his option to question Golangcos rights as lessee, as the transfer by Lianco was without the Archbishops consent. On April 7, 1949,Golangco applied for fire insurance with Traders Insurance and Surety Co. of which Golangco was issued fire insurance policy stating that all insurance covered under said policy, includes the 'rent or other subject matter of insurance in respect of or in connection with any building or any property contained in any building'. On June 5, 1949, fire ravaged the building premises pursuant of which Golangco requested Traders Insurance to pay the insurance amount of 10,000 including the amount of rent P1,100 monthly. Traders insurance refused to pay the insurance as pertaining to the rent averring that Golangco has no insurable interest therein. Issue: WON Golangco has insurable interest ( in the property) on the rent of the building premises which may lawfully/validly be subject of insurance? Ruling: Yes, Sec. 13 of the Insurance Code provides that Every interest in the 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, is an insurable interest. By virtue of the contract between Tomas B. Lianco and the Archbishop, Lianco erected the building of which the premises in question form part and became owner thereof . He transferred the ownership of the premises in question to kaw Eng Si, who in turn transferred it to plaintiff Juan Golangco .Lianco and the actual occupant of the premises acknowledged plaintiff's right to collect rentals thereon in a compromise agreement which was incorporated in a judicial judgment. Both at the time of the issuance of the policy and at the time of the fire, plaintiff Golangco was in legal possession of the premises, collecting rentals from its occupant. It seems plain that if the premises were destroyed - as they were - by fire, Golangco would be, as he was, directly damnified thereby; and hence he had an insurable interest therein (section 13, Insurance Law). It is to be noted that the policy so worded indicates that the fire insurance policy includes 'rent or other subject matter of insurance in respect of or in connection with any building or any property contained in any building'. The argument of Traders Insurance that a policy of insurance must specify the interest of the insured in the property insured, if he is not the absolute owner thereof, is not meritorious because it was the Traders, not Golangco, who prepared that policy, and it cannot take advantage of its own acts to plaintiff's detriment; and, in any case, this provision was substantially complied with by Golangco when he made a full and clear statement of his interests to Trader's manager. The contract between Lianco and the Archbishop only forbade Lianco from transferring 'his rights as LESSEE but the contracts Lianco made in favor of Kaw Eng Si and plaintiff Golangco did not transfer such rights; and hence no written consent thereto was necessary. At worst, the contract would be voidable, but not a void contract, at the option of the Archbishop; but this would not deprive Golangco of his insurable interest until such option were exercised; and it does not appear that it was ever exercised. The ejectment case filed by the Archbishop against Lianco did not remove nor destroy plaintiff's insurable interest: first, because plaintiff was not a party thereto and cannot be bound 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; 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."