Christern Huenefeld, & Co., Inc., after payment of corresponding premium, obtained from the petitioner, Filipinas Cia. de Seguros, fire policy No. 29333 in the sum of P1000,000, covering merchandise contained in a building. During the Japanese military occupation, the building and insured merchandise were burned.
Respondent submitted to the petitioner its claim under the policy. The petitioner refused to pay the claim on the ground that the policy in favor of the respondent had ceased to be in force on the date the United States declared war against Germany, the respondent Corporation (though organized under and by virtue of the laws of the Philippines) being controlled by the German subjects and the petitioner being a company under American jurisdiction when said policy was issued on October 1, 1941.
The respondent filed a complaint with CFI for the purpose of recovering from the respondent; dismissed the action without pronouncement as to costs. The Court of Appeals, the judgment of the Court of First Instance of Manila was affirmed, with costs.
As the Philippine Insurance Law (Act No. 2427, as amended), in its section 8, provides that “anyone except a public enemy may be insured,” an insurance policy ceases to be allowable as soon as an insured becomes a public enemy.
WON the respondent corporation became an enemy when the United States declared war against Germany
There is no question that the majority of the stockholders of the respondent corporation were German subjects. This being so, we have to rule that said respondfloent became an enemy corporation upon the outbreak of the war between the United States and Germany. The respondent having become an enemy corporation on December 10, 1941, the insurance policy issued in its favor on October 1, 1941, by the petitioner (a Philippine corporation) had ceased to be valid and enforceable, and since the insured goods were burned after December 10, 1941, and during the war, the respondent was not entitled to any indemnity under said policy from the petitioner. However, elementary rules of justice (in the absence of specific provision in the Insurance Law) require that the premium paid by the respondent for the period covered by its policy from December 11, 1941, should be returned by the petitioner.
The Philippine Insurance Law (Act No. 2427, as amended), in section 8, provides that “anyone except a public enemy may be insured.” It stands to reason that an insurance policy ceases to be allowable as soon as an insured becomes a public enemy.
The nationality of a private corporation is determined by the character or citizenship of its controlling stockholders. Where majority of the stockholders of a corporation were German subjects, the corporation became an enemy corporation upon the outbreak of the war between the United States and Germany.
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