View full case

PARAMOUNT INSURANCE CORPORATION v. SPS. YVES

FACTS:

On May 26, 1994, the respondents insured their 1994 Toyota Corolla sedan with the petitioner under a comprehensive motor vehicle insurance policy. During the period of insurance, the car was unlawfully taken and the respondents immediately reported the theft. They filed a claim for reimbursement, but the petitioner refused to pay. The respondents then filed a complaint before the trial court praying for the payment of the insured value of their car. The trial court dismissed the complaint, citing double recovery. On appeal, the Court of Appeals reversed the trial court’s decision and held that the loss of the vehicle falls within the concept of the “theft clause” under the insurance policy.

ISSUES:

  1. Whether or not the Court of Appeals decided the case a quo in a way not in accord with law and/or applicable jurisprudence when it promulgated in favor of the respondents Remondeulaz, making Paramount liable for the alleged "theft" of respondents' vehicle.

  2. Whether or not petitioner is liable under the insurance policy for the loss of respondents' vehicle.

RULING:

  1. The Supreme Court found that the Court of Appeals correctly decided the case.

  2. The Supreme Court ruled that the loss of respondents' vehicle falls within the concept of the "theft clause" under the insurance policy. It established that the vehicle was unlawfully taken by Sales without the consent or authority from the respondents, thus qualifying as theft.

PRINCIPLES:

  1. An insurance policy covering "theft" provides indemnity when a vehicle is taken without the owner's consent, even if initially entrusted for specific purposes such as adding accessories or repairs.

  2. The misappropriation of a vehicle by someone who has only physical possession (not juridical possession) can constitute theft, making the insurer liable under the "theft clause."

  3. The distinction between theft and estafa is highlighted, where theft involves taking the property, while estafa involves the conversion or misuse of property that was initially rightfully possessed.