Paris-Manila, Perfume Co. vs. Phœnix Assurance Co.; No. 25845. December 17, 1926

FACTS:

In May 1924, Phœnix Assurance Co., (corporation under Great Britain Law) issued a fire insurance Policy No. 841163 in the sum of P13,000 upon the property of Paris-Manila. With the knowledge of the defendant, the property was also insured in two other companies, one for P12,000, and the other for P5,000.  The property covered by the insurance was completely destroyed by fire for the total loss to the plaintiff of P38,025.56. Upon presentation of the claim, Phoenix unjustly refused to pay. Petitioner also requested the defendant to appoint an arbitrator under the provisions of section 17 of the policy, which was also denied.

The denial of Phoenix Insurance is on the ground that (a) the policywas issued “to one Peter Johnson, as proprietor of ParisManila Perfumery Co.,” and that the company was not the insured named in the policy (b) “the policy of insurance did not cover any loss or damage occasioned by explosion, and that the loss was occasioned by an explosion, and was not covered by the policy. (c) the claim of the plaintiff is fraudulent as to the quantity and value of the insured property at the time of the fire, thus all benefits are forfeited. It relies on Sec.6 of the policy which provides that the insurance policy shall not cover any Loss or damage occasioned by explosion.

The lower court rendered judgment in favor of the plaintiff for P13,000. 

ISSUE:

Whether the policy do not cover any loss or damage occasioned by explosion

HELD:

NO. It is true that it may be that the explosion was the primary cause of the fire, but that is only a matter of conjecture, and upon that point, the burden of proof was upon the defendant. Section 6 excludes only the damages which are the direct result of the explosion itself, and that it does not except damages which occurred from the fire occurring after the explosion, even though the explosion may have been the primary cause of the fire. There is no competent evidence as to whether the explosion caused the fire or the fire caused the explosion.

The factory where the fire occurred was filled with numerous kinds of essences and oils used in the manufacture of perfumery and with a quantity of alcohol and manufac-tured perfumes, all of which were of a highly inflammable nature, and the fire may have started from any one of a number of reasons. But in the final analysis, the fact remains that there was a fire, and that plaintiff’s property was destroyed.

The defendant having issued its policy which was in legal force and effect at the time of the fire, it is bound by its terms and conditions, and the property having been destroyed, the burden of proof was upon the defendant to show that it was exempt from liability under the terms and conditions of the policy, and upon that point, there is a failure of proof.

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