Ang v Fulton Fire Insurance (Geronimo)
July 31, 1961 | Labrador, J | G.R. No L-15862 The condition contained in the insurance policy that claims must be
Prescriptive Period
PETITIONERS: PAULO ANG and SALLY C. ANG
RESPONDENTS: FULTON FIRE INSURANCE CO., ET AL.,
SUMMARY:
The present action was instituted by the spouses Paulo Ang and Sally
C.Ang(petitioner) against the Fulton Fire Insurance Company(respondent)
and the Paramount Surety and Insurance Company, Inc.(agent) to
recover from them the face value of a fire insurance policy issued in
plaintiffs' favor covering a store owned and operated by them in Laoag,
Ilocos Norte.
The initial fire insurance policy was entered on September 9, 1953 over
stocks of general merchandise, consisting principally of dry goods,
contained in a building. The premium is P500.00 annually. The insurance
was issued for one year, but the same was renewed for another year on
September 31, 1954.
In Dec 1954 a fire consumed the store and Ang filed claims however it was
denied.
In January 1955: Paulo Ang and 10 others were charged for arson in the
Justice of the Peace Court of Ilocos Norte. Remanded to CFI and the latter
acquitted Paulo Ang of the crime of arson.
In May 1956 Ang filed case against Fulton’s agent(Paramount surety). On
Sept 1957, this case was dismissed without prejudice but ruled that the
bringing of the action in the Court of First Instance of Manila on May 11,
1956 tolled/suspended the running of the 12 months period within which
the action must be filed.
FACTS:
Now on May 1958: Ang filed the present case against Fulton. But Fulton
Fire raise a defense that the period for filing an action has already
prescribed. The petitioners received the notice of denial on April 18,
1956, but only bringing the action on May 5, 1958, thus all the benefits
under the policy have been forfeited.
Issue:
Does filing of the previous suit against the agent of Fulton Fire suspends
the running of the prescriptive period for filing an action? (No)
Held:
No, period was not suspended, and the action had already prescribed.
presented within one year after rejection is not merely a procedural
requirement but an important matter essential to a prompt settlement of
claims against insurance companies, as it demands that insurance suits
be brought by the insured while the evidence as to the origin and cause of
destruction have not yet disappeared.
The bringing of the action against the Paramount Surety & Insurance
Company, the agent of the defendant company, can not have any legal
effect except that of notifying the agent of the claim. Beyond such
notification, the filing of the action can serve no other purpose. There is no
law giving any effect to such action upon the principal. Besides, there is no
condition in the policy that the action must be filed against the agent, and
this Court can not by interpretation extend the clear scope of the
agreement beyond what is agreed upon by the parties.
A contract is the law between the parties, and their agreement that an
action on a claim denied by the insurer must be brought within one year
from the denial, governs, not the rules on the prescription of actions.
Therefore, the period was not suspended, and the action had already
prescribed
DOCTRINE:
A contract is the law between the parties, and their agreement that an
action on a claim denied by the insurer must be brought within one year
from the denial, governs, not the rules on the prescription of actions.
1. The present action was instituted by the spouses Paulo Ang and
Sally C.Ang(petitioner) against the Fulton Fire Insurance
Company(respondent) and the Paramount Surety and Insurance
Company, Inc.(agent) to recover from them the face value of a fire
insurance policy issued in plaintiffs' favor covering a store owned and
operated by them in Laoag, Ilocos Norte.
2. The initial fire insurance policy was entered on September 9, 1953
over stocks of general merchandise, consisting principally of dry
goods, contained in a building. The premium is P500.00 annually.
The insurance was issued for one year, but the same was renewed
for another year on September 31, 1954.
3. On December 27, 1954, the store containing the goods insured was
destroyed by fire. On December 30, petitioners executed the first
 claim form. These were sent to the Adjustor company of Fulton Fire. 3. It is in the nature of a condition precedent to the liability of the
However, Fulton Fire denied the insurance claim. insurer, or in the other terms, a resolutory clause, the purpose of
4. On May 11,1956, Petitioners first filed a case against paramount which is to terminate all liabilities in case the action is not filed by the
insurance(agent) but was dimissed by the CFI. It ruled that that the insured within the period stipulated.
bringing of the action in the Court of First Instance of Manila on May 4. The bringing of the action against the Paramount Surety & Insurance
11, 1956 tolled/suspended the running of the 12 months period within Company, the agent of the defendant company, can not have any
which the action must be filed. legal effect except that of notifying the agent of the claim. Beyond
5. Now may 1958, petitioner filed a case against Fulton Fire. Fulton fire such notification, the filing of the action can serve no other purpose.
admitting the existence of the contract of insurance, its renewal and There is no law giving any effect to such action upon the principal.
the loss by fire of the department store and the merchandise Besides, there is no condition in the policy that the action must be
contained therein, but denying that the loss by the fire was filed against the agent, and this Court can not by interpretation
accidental, alleging that it was occasioned by the wilful act of the extend the clear scope of the agreement beyond what is agreed
plaintiff Paulo Ang himself. upon by the parties.
a. This was evidence by an Arson cases filed against Paulo 5. A contract is the law between the parties, and their agreement that
Ang and 10 others but was eventually dismissed an action on a claim denied by the insurer must be brought within
6. Now, Fulton fire claims that under paragraph 13 of the policy: one year from the denial, governs, not the rules on the prescription of
a. If the loss or damage is occasioned by the wilful act of the actions.
insurer, or if the claim is made and rejected but no action is 6. Therefore, the period was not suspended, and the action had already
commenced within 12 months after such rejection, all prescribed.
benefits under the policy would be forfeited,
7. In this case, the claim of the plaintiffs were denied due to the
plaintiffs receiving the notice of denial on April 18, 1956, but only
bringing the action on May 5, 1958, thus all the benefits under the
policy have been forfeited.
8. Petitioners raise a defenese and alleges that on May 11, 1956, they
had instituted Civil Case against Paramanount insurance(agent) thus
the running of the 12 month period was tolled/suspended.
9. This leads to the present to the where Petitioners are filing a case
against the Fulton Fire and not just the agent.
ISSUES:
1. Does filing of the previous suit against the agent of Fulton Fire
suspends the running of the prescriptive period for filing an action?
(No)
RULING: The judgment appealed from is hereby set aside and the case
dismissed, with costs against plaintiffs-appellees.
RATIO:
First Issue
1. No, period was not suspended, and the action had already
prescribed.
2. The condition contained in the insurance policy that claims must be
presented within one year after rejection is not merely a procedural
requirement but an important matter essential to a prompt settlement
of claims against insurance companies, as it demands that insurance
suits be brought by the insured while the evidence as to the origin
and cause of destruction have not yet disappeared.