RCBC vs.

CA

Facts:
GOYU was granted credit facilities and accommodations by the RCBC initially in the
amount of P 30 million. Upon GOYU’s application, the credit was increased to P50 Million, then
P90 Million, then P117 Million. As security, GOYU executed 2 real estate mortgages and 2 credit
mortgages in favor of RCBC. Under the 4 contracts, GOYU committed itself to insure the
mortgaged properties with an insurance company approved by RCBC, and subsequently endorse
and deliver the insurance policies to RCBC.
GOYU then obtained 10 policies from MICO. GOYU’s buildings were gutted by fire and it
claimed indemnity from MICO but the latter denied the claim on the ground that the insurance
policies were either attached pursuant to the writs of attachments/garnishments issued by
various courts or that the proceeds were also claimed by other creditors of GOYU. GOYU, alleging
better rights to the proceeds, filed for specific performance and damages before the RTC.
The trial court ruled in favor of GOYU for the fire loss claims but ordered it to pay RCBC
its loan obligations. On appeal to the CA, it affirmed the ruling with regard to the liabilities of
MICO and RCBC. The trial court and appellate courts both held that, since the endorsements do
not bear the signature of any officer of GOYU, the endorsements are defective. The CA then
ordered GOYU to pay its obligation to RCBC without any interest, surcharges and penalties.

ISSUE:
Whether or not RCBC as mortgagee, has any right over the insurance policies taken by
GOYU, the mortgagor, in case of the occurrence of loss.

HELD:
YES.
The mortgagor and the mortgagee have separate and distinct insurable interests over the
same mortgaged property, such that each one of them may insure the same property for his own
sole benefit.
In the case at bar, although it appears that GOYU obtained the subject insurance policies
naming itself as the sole payee, the intention of the parties nonetheless, as shown by their
contemporaneous acts, must be given due consideration in order to better serve the interest of
justice and equity. GOYU continued to enjoy the benefits of the credit facilities extended to it by
RCBC thus, GOYU is at the very least estopped from assailing their operative effects.
Therefore, it is RCBC which has the right to claim the insurance proceeds, in substitution
of the property lost in the fire. Having assigned its rights, GOYU lost its standing as the beneficiary
of the said insurance policies.