56. Garcia v.

Hong Kong Fire & Marine Insurance, GR 20341, 1 Sept 1923

CASE DIGEST #1

Facts:

>  Garcia had his merchandise insured by Hongkong Fire and Marine Insurance Co.

>  The insurance company however made a mistake and issued a policy covering the building where the
merchandise was stored. (The building was not owned by Garcia)

>  The policy was written in English, of which Garcia was ignorant, so he could not have noticed the error of the
insurance company.

>  Said policy was later on assigned by Garcia to PNB to secure a loan.  PNB acknowledged receipt of said policy,
referring to it as a policy covering the merchandise.

>  The insurance company made the necessary endorsements to PNB.

>  The building which housed the merchandise was later razed by fire.  The insurance company refused to pay due
to the fact that the policy indicates insurance on the building and not on the merchandise.

Issue:

Whether or not Garcia can collect.

Held:

YES.

The defense of the insurer is purely technical.  The mistake was obviously on the part of the insurer when it issued a
wrong policy.  It cannot deny such allegation due to the fact that it even confirmed with PNB the nature of said policy
when it was endorsed.  Garcia could not have noticed the mistake due to his ignorance of the English language.

CASE DIGEST #2

FACTS:
  August 30, 1919: Garcia executed a mortgage to the Philippine National Bank on the merchandise
allegedly insured by Hongkong Fire & Marine Insurance Co. and with the consent of the latter endorsed
the policy to PNB 
 PNB informed Hongkong Fire through exchange of letters.  Hongkong failed to notify PNB or Garcia
that it was for the building and not the merchandise.
 February 6, 1920: Fire took place and destroyed the merchandise so Garcia filed a claim which was
refused.
 RTC: favored Garcia
ISSUE: W/N 

HELD: the lower court is affirmed

 as a matter of fair dealing, it should have notified the Bank that the policy was on the building. It will be
noted that the letters in question were all written several months before the fire.
 Under these circumstances it seems clear and manifest that the insured, as well as the manager of the
National Bank at Legaspi, who was interested in the policy, because the same secured a loan of
P6,000 made to Domingo Garcia, and the corporation of Wise & Co., Ltd., which represented the
insurance company, have been in the belief that it was not the building but the merchandise that was
insured, for the reason that none of them paid attention to the context of the policy.