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    Verendia V Ca (Fidelity & Surety Co. of The Phils)

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    Praisah Marjorey Picot
    Verendia insured the same residential building with three different insurance companies, including Fidelity, for a total of over $1 million in coverage. After a fire destroyed the building, Fidelity refused to pay Verendia's claim, citing over-insurance and fraudulent misrepresentation of the lessee. The RTC ruled in Fidelity's favor, but the CA reversed. The Supreme Court reversed the CA, finding that Verendia presented a fraudulent lease contract in support of his claim, in violation of his insurance contract with Fidelity, and thereby forfeited his right to payment. The RTC decision finding Fidelity not liable was reinstated.

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    Verendia V Ca (Fidelity & Surety Co. of The Phils)

    Uploaded by

    Praisah Marjorey Picot
    98 views1 page
    Verendia insured the same residential building with three different insurance companies, including Fidelity, for a total of over $1 million in coverage. After a fire destroyed the building, Fidelity refused to pay Verendia's claim, citing over-insurance and fraudulent misrepresentation of the lessee. The RTC ruled in Fidelity's favor, but the CA reversed. The Supreme Court reversed the CA, finding that Verendia presented a fraudulent lease contract in support of his claim, in violation of his insurance contract with Fidelity, and thereby forfeited his right to payment. The RTC decision finding Fidelity not liable was reinstated.

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    Verendia insured the same residential building with three different insurance companies, including Fidelity, for a total of over $1 million in coverage. After a fire destroyed the building, Fidelity refused to pay Verendia's claim, citing over-insurance and fraudulent misrepresentation of the lessee. The RTC ruled in Fidelity's favor, but the CA reversed. The Supreme Court reversed the CA, finding that Verendia presented a fraudulent lease contract in support of his claim, in violation of his insurance contract with Fidelity, and thereby forfeited his right to payment. The RTC decision finding Fidelity not liable was reinstated.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    98 views1 page

    Verendia V Ca (Fidelity & Surety Co. of The Phils)

    Uploaded by

    Praisah Marjorey Picot
    Verendia insured the same residential building with three different insurance companies, including Fidelity, for a total of over $1 million in coverage. After a fire destroyed the building, Fidelity refused to pay Verendia's claim, citing over-insurance and fraudulent misrepresentation of the lessee. The RTC ruled in Fidelity's favor, but the CA reversed. The Supreme Court reversed the CA, finding that Verendia presented a fraudulent lease contract in support of his claim, in violation of his insurance contract with Fidelity, and thereby forfeited his right to payment. The RTC decision finding Fidelity not liable was reinstated.

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    VERENDIA V CA (FIDELITY & SURETY CO.

    OF THE PHILS)
    217 SCRA 417
    MELO; January 22, 1993

    NATURE
    Petition to review decision of the CA

    FACTS
    - Fidelity Co. issued a Fire Insurance Policy covering Verendia’s residential building in the amount of P385k.
    Verendia also insured the same building with two other companies (Country Bankers Insurance for P56k, and
    Development Insurance for P400k).
    - While all 3 policies were in force, the insured property was completely destroyed by fire. Verendia filed a claim
    against Fidelity, but the latter refused payment, thus a complaint was filed in the RTC.
    Fidelity’s reason for refusal: the policy was avoided by reason of over-insurance, and that Verendia maliciously
    represented that the building was under lease to a Roberto Garcia, when it was actually a Marcelo Garcia who was
    the lessee.
    - RTC: policy was violated by Verendia when it failed to inform Fidelity of his other insurance coverages, thus no
    need to pay.
    - CA: reversed decision

    ISSUE
    (There is a procedural issue involved here, but is irrelevant to our discussion. It concerns the filing of a motion for
    extension of time to file a motion for reconsideration, where the court said that although it now prohibits filing of
    such motion, the instant motion was filed before the effectivity of this rule, thus allowing the adjudication of the
    case)
    WON Fidelity was liable to pay Verendia considering the circumstances

    HELD
    1. NO
    Ratio As the insurance contract is the law between the parties, Verendia is deemed to have forfeited his right to
    claim by the misrepresentation he made.
    Reasoning
    - the court reviewed the factual findings of the courts below, since it appears that there was a misapprehension of
    the facts by the CA.
    - Verendia is found to have concocted the lease contract to deflect responsibility for the fire towards an alleged
    lessee, even making it appear that the alleged lessee had disappeared, inflated the value of the property, and
    insured same property with two other companies.
    - An insurance contract is the law between the parties, its terms and conditions constitute the measure of the
    insurer’s liability and compliance therewith is a condition precedent to the insured’s right to recovery from the
    insurer.
    - As it is also a contract of adhesion, an insurance contract should be liberally construed in favor of the insured and
    strictly against the insurer company which usually prepares it.
    - Considering, however, the fact that Verendia used a false lease contract to support his claim, the terms of the
    policy should be strictly construed against the insured. Verendia failed to live by the terms of the policy, specifically
    Section 13 thereof which is expressed in terms that are clear and unambiguous, that all benefits under the policy
    shall be forfeited “If the claim be in any respect fraudulent, or if any false declaration be made or used in support
    thereof, or if any fraudulent means or devises are used by the Insured or anyone acting in his behalf to obtain any
    benefit under the policy”. Verendia, having presented a false declaration to support his claim for benefits in the
    form of a fraudulent lease contract, he forfeited all benefits therein by virtue of Section 13 of the policy in the
    absence of proof that Fidelity waived such provision. Worse yet, by presenting a false lease contract, Verendia
    reprehensibly disregarded the principle that insurance contracts are uberrimae fidae and demand the most
    abundant good faith.
    Disposition Decision of CA reversed, and that of RTC is reinstated.

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