FACTS
Armando Geagonia is the owner of Norman’s Mart located in the public market of San Francisco, Agusan del Sur. He obtained from Country Bankers Insurance Corporation
a fire insurance policy for P100,000.00. The period of the policy was from 1989 to 1990 and covered the stock-in-trade consisting principally of dry goods such as RTW’s for men and women wear and other usual to assured’s business.” Geagonia declared in the policy under the subheading entitled CO-INSURANCE that Mercantile Insurance Co., Inc. was the co-insurer for P50,000.00.
Thereafter, fire of accidental origin broke out at the public market of San Francisco, Agusan del Sur. Geagonia’s insured stocks-in-trade were completely destroyed prompting him to file with the CBIC a claim under the policy. CBIC denied the claim because it found that at the time of the loss of the stocks-in-trade were likewise covered by fire insurance policies for P100,000.00 each, issued by the Cebu Branch of the Philippines First Insurance Co., Inc. (hereinafter PFIC). These policies indicate that the insured was “Messrs. Discount Mart (Mr. Armando Geagonia, Prop.)” with a mortgage clause. The basis of CBIC’s denial was the alleged violation of Condition 3 of the policy which states that the insured shall give notice to the Company of any insurance or insurances already effected, or which may subsequently be effected, covering any of the property or properties consisting of stocks in trade, goods in process.