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FINMAN GENERAL ASSURANCE CORPORATION v. CA

FACTS:

On September 15, 1981, private respondent Usiphil Incorporated obtained a fire insurance policy from petitioner Finman General Assurance Corporation. In 1982, private respondent filed an insurance claim with petitioner due to the loss of insured properties caused by fire. Petitioner appointed Adjuster H.H. Bayne to assess the loss and requested private respondent to submit a formal claim and proof of loss. Private respondent complied and submitted its Sworn Statement of Loss and Formal Claim, signed by its manager Reynaldo Cayetano, as well as Proof of Loss signed by its Accounting Manager Pedro Palallos and countersigned by Adjuster F.C. Medina.

Respondent's claim was reconciled with petitioner by Finance Manager Rosauro Maghirang, and a Statement/Agreement indicating the amount due was signed by Maghirang and Palallos. However, petitioner refused to pay the insurance claim despite repeated demands, leading private respondent to file a complaint in court.

The trial court ruled in favor of the private respondent, ordering petitioner to pay the insurance claim as well as interest, attorney's fees, and exemplary damages. On appeal, the Court of Appeals affirmed the trial court's decision but modified the interest to be paid. Petitioner now seeks the reversal of the appellate court's decision before the Supreme Court.

ISSUES:

  1. Did the private respondent (Usiphil Incorporated) comply with the requirements under Policy Condition No. 13 to justify its insurance claim?

  2. Is the petitioner (Finman General Assurance Corporation) liable to pay the private respondent an interest rate of 24% per annum in addition to the principal amount of the insurance claim?

RULING:

  1. Yes. The Court ruled that private respondent substantially complied with Policy Condition No. 13. The submission of a Sworn Statement of Loss and Formal Claim and Proof of Loss was deemed sufficient. Additionally, the petitioner acknowledged its liability when it signed a document indicating the amount due to the private respondent.

  2. Yes. The Court upheld the award of 24% interest per annum, as provided under Sections 243 and 244 of the Insurance Code, and also supported by Section 29 of the insurance policy. The court found no cogent reason to deviate from the factual findings of the trial court and the Court of Appeals.

PRINCIPLES:

  • Substantial Compliance: For the submission of documents to prove loss in insurance claims, substantial compliance with the policy requirements is sufficient.

  • Agency Apparent Authority: One who clothes another with apparent authority as his agent and holds him out to the public as such cannot later deny the agent's authority when a third party has entered a contract in good faith.

  • Interest on Delayed Payment: Under Sections 243 and 244 of the Insurance Code, and as enshrined within the policy itself, failure to pay the insurance claim within the prescribed time entitles the insured to collect interest at twice the ceiling prescribed by the Monetary Board.

  • Prima Facie Evidence of Unreasonable Delay: Failure to pay the insurance claim within the time fixed in both Sections 243 and 244 is considered prima facie evidence of unreasonable delay in payment.

  • Cognizance of Appellate Court's Factual Findings: The Supreme Court refrains from disturbing the factual findings and conclusions of the trial court and the appellate court, absent clear evidence that essential facts were overlooked.