REPUBLIC OF THE PHILIPPINES

SUPREME COURT
Manila

SECOND DIVISION

NOTICE
Sirs/Mesdames:

Please take notice that the Court, Second Division, issued a Resolution
dated 17 February 2021 which reads as follows:

"G.R. No. 204703 (Multi-Ware Manufacturing Corporation v.

Philippine General Insurance Corporation and Ernesto S. Sy, Doing
Business Under the Name and Style "Pan Oceanic Insurance
Services'') . - This Petition for Review on Certiorari' assails the
Decision2 dated July 20, 2012 and Resolution3 dated November 19, 2012
of the Court of Appeals (CA) in CA-G.R. CV No. 90304, which reversed
and set aside the Decision4 dated September 14, 2007 of the Regional
Trial Court (RTC) of Manila, Branch 20, in Civil Case No. 02-105314.
The case involves petitioner Multi-ware Manufacturing Corp. 's (Multi-
ware) complaint for collection of insurance proceeds from respondent
Philippine General Insurance Corp. (Philgen).

Multi-ware is a corporation engaged in the manufacture of plastic

wares.5 It insured with Philgen various machineries, stocks in trade, raw
materials for its plastic manufacturing business, and buildings, where
these are stored and operated, against any damage or loss arising from fire
or lightning under Fire Insurance Policy No. 000003666. 6 Specifically,
the insurance covers Multi-ware's machineries, equipment, building,
stock-in-trade and raw materials to be used in its plastic wares
manufacturing business located in the Philippine Tobacco Administration
Compound at No. 26, Isidro Street, Balubaran, Valenzuela City, Metro
Manila. 7 The policy was valued at P60,000,000.00, covering a period of
one year from December 14, ] 999 until December 14, 2000.8

1
Rollo, pp. I0-62.
!d. at 64-84; penned by Justice Myra V. Garcia-Ferrn111Liez. with Lhe concurrence of Associate
Justices Magdangal M. De Leon and Stephen C. Cruz.
3
Id. at I I 9- 122.
4 Id. at 124-160.
5
Id. at 13.
6 Id. at 65.
Id.
8
Id.

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 Resolution -2- G.R. No. 204703
February 17, 2021

Aside from that taken from Philgen, Multi-ware also procured fire
insurance policies from other insurance companies, 9 including one from
Prudential Guarantee Assurance, Inc. (Prudential Guarantee) through
respondent Ernesto S. Sy (Ernesto), doing business under the name of
"Pan Oceanic Insurance Services." 10

On April 21, 2000, Multi-ware's buildings, including their

contents, subject of the Philgen policy were completely razed by fire. 11
Multi-ware then demanded payment of the full amount of the insurance
proceeds from Philgen. Philgen, however, denied the claim on December
4, 2001 on the ground that Multi-ware violated three policy conditions as
stated in the report of its claims adjuster. One of which is policy
Condition 3, which requires Multi-ware to inform Philgen of additional
insurance/s it secured or will secure over its properties insured with
Philgen. 12 Condition 3 provides:

The insured shall give notice to the Company of any insurance or

insurances already effected, or which may be subsequently be effected,
covering any of the property or properties consisting of stocks in trade,
goods in process and/or inventories only hereby insured, and unless
such notice be given and the particulars of such insurance or insurances
be stated therein or endorsed on this policy pursuant to Section 50 of
the Insurance Code, by and on behalf of the Company, before the
occun-ence of any loss or damage, all benefits under this policy shall
be deemed forfeited, provided however, that the condition shall not
apply when the total insurance or insurances in force at the time of loss
or damage is not more than P200,000.00. 13 (Emphasis supplied.)

On December 10, 2002, Multi-ware filed a complaint against

Philgen and Ernesto for breach of contract and/or collection of sum of
money with damages before the R TC, demanding payment of the face
value of the policy in the amount of P60,000,000.00 plus interest,
damages, attorney's fees and litigation expenses. 14 It alleged that Philgen
unjustly refused to pay the insurance proceeds 15 while Ernesto failed to
fulfill his promise that he will inform the other insurance companies of
the insurance Multi-ware procured from Prudential Guarantee. 16 Philgen
and Ernesto separately filed their Answers with counterclaims. 17

During the trial, Philgen presented Fire Insurance Policy No.

FLMLA Y 00000174NA issued by Prudential Guarantee as evidence. 18 It
also offered in evidence several fire insurance policies procured by Multi-

9
Id. at 79.
10
Id. at 126.
11
/d.at65.
12
ld.atl7andl47.
13
Id. at 77-78.
14
Id. at 65
1s Id.
16
Id. at 127.
17
Id. at 125, 127.
18
Id. at 133.

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 Resolution -3- G.R. No. 204703
February 17, 2021

ware from other insurance companies, namely, Cibeles Insurance

Corporation, Asia Traders Insurance Corporation, Western Guaranty
Corporation, and Philippine Pryce Insurance Corporation. 19 In addition,
Jaime Dela Merced (Dela Merced), a representative of Philgen's claims
adjuster, testified that Multi-ware also procured a fire insurance policy
from Reliance Surety and Insurance Company, Inc., covering the same
stocks insured by Philgen. 20

Multi-ware admitted the existence of fire insurance policies from

Prudential Guarantee,21 Asia Traders Insurance Corporation, 22 Western
Guaranty Corporation, 23 Cibeles Insurance Corporation,24 and Pryce
Insurance Corporation. 25 It, however, posited that these insurance policies
do not cover the same subject matter and interest insured by Philgen.

In its Decision26 dated September 14, 2007, the R TC ruled that

Philgen failed to establish its grounds for denying payment. Philgen
cannot rely on the supposed violation of Condition 3 because it failed to
prove that the other insurance policies procured by Multi-ware were on
the same subject matter, interest, and risk since Philgen did not present
and offer as evidence the supposed insurance policy procured by Multi-
ware from Prudential Guarantee. 27 It was also held that Multi-ware (and
not Ernesto) had the obligation to inform Philgen of other insurance
policies procured under Condition 3, and that Ernesto had no participation
in the denial of Multi-ware's claim. The RTC disposed, thus:

Premises considered, judgment is hereby rendered in favor of

the plaintiff, Multi-ware Manufacturing Corporation and against
defendant Philippine General Insurance Corporation ordering the latter
to pay the plaintiff the following:

1. [P]60M representing the amount of the insurance coverage plus

6% interest from the date of the filing of the case.

2. [P]30,000.00 for attorney's fees.

The case against defendant Ernesto Sy and his counterclaim as

well as Philgen's counterclaim are hereby ordered DISMISSED.

SO ORDERED. 28

19
Id.at 132- 133.
20
Id. at 148-149.
21 Id. at 135; Fire Insurance Policy No. FLMLAN 000U0174NA.
22 Id.; Fire Insurance Policy Nos. 8043532, F-0'.14458, F-0344682, and SBMP0000000 144.
23
Id.; Fire Insurance Policy No.50-1 1900 I.
24
Id. ; Fire Insurance Policy No. F 80-42261.
25 Id.; Fire Insurance Policy No. 30973 .
26
Id.at 124- 160.
27
Id. at 158.
28
ld.atl60.

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 Resolution -4- G.R. No. 204703
February 17, 2021

Multi-ware moved for partial reconsideration29 but the RTC denied

it. 30 Dissatisfied, both Philgen and Multi-ware appealed to the CA. 3 1

In its Decision32 dated July 20, 2012, the CA reversed the RTC
Decision. It granted Philgen's appeal and accordingly dismissed Multi-
ware's complaint. 33 The CA ruled that Multi-ware violated Condition 3
because "the factual findings of the trial court and the admission of the
witnesses for Multi-ware clearly show that the latter obtained other fire
insurance coverage from Prudential Guarantee, among other insurance
companies, for its buildings, machineries, equipment, stocks in trade,
goods and raw materials x x x however, Multi-ware admittedly failed to
disclose this fact to [Philgen] or any of its agents or representatives before
the occurrence of the fire and loss ofproperty." 34 Multi-ware 's appeal, on
the other hand, was denied, thus:

WHEREFORE, the decision of the Regional Trial Court,

Branch 20, Manila in Civil Case No. G2-105314 dated September 14,
2007 is REVERSED and SET ASlDE. The complaint of Multi-Ware
Manufacturing Corporation for breach of contract and/or collection of
sum of money with damages against Philippine General Insurance
Corporation and Ernesto Sy is dismissed. The counterclaim of
Philippine General Insurance Corporation is dismi ssed for lack of
merit.

SO ORDERED. 35

Multi-ware sought partial reconsideration, but the CA denied it. 36

Hence, this petition.

Multi-ware argues that the CA erred in ruling that it violated

Condition 3 because there was no proof that the other insurance policies it
obtained were upon the same subject matter, interest and risk. 37 Also, the
CA erred in applying Condition 3 because the insurance it procured from
Prudential Guarantee does not cover stocks in trade, goods in process
and/or inventories, which are the subject of Condition 3. Multi-ware also
claims attorney' s fees and interest for the unreasonable delay in the
payment of the insurance proceeds. 38

29
Id. at 162-1 73.
30
Id. at 175- 176.
31
Id. at 66.
32
Id . at 64-84.
33 Id . at 84.
34 Id. at 79.
35 Id . at 84 .
36
Id . at 119-1 22.
37
Id . at 10-62.
38
Id. at 36-62.

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1r(.t
 Resolution -5- G.R. No. 204703
February 17, 2021

In its Comment, 39 Philgen points out that the CA's finding that
Multi-ware procured another insurance from Prudential Guarantee
covering the same properties insured with Philgen is supported by the
evidence on record, which includes the admissions of Multi-ware's
°
witnesses. 4 For his part, Ernesto asserts that the petition should be
dismissed for raising questions of fact which are beyond the ambit of a
petition for review on certiorari. 41 In addition, it was Multi-ware's
obligation to comply with Condition 3 of Philgen's policy and thus, he
could not be held liable if Multi-ware failed to comply with it. 42 Ernesto
also calls the Court's attention to the other similar cases involving Multi-
ware where it was held to have violated a similarly worded co-insurance
clause. 43

In response, Multi-ware reiterates Condition 3 should not apply as

the insurance policy from Prudential Guarantee only covered
machineries, tools, spare parts, and buildings, and excludes stocks in
trade; 44 and that the other cases that Ernesto cited cannot be applied in
this case either by the law of the case or res judicata. 45

The issues for the resolution of the Court are the following:

I. Whether the CA erred in ruling that Multi-ware violated

Condition 3; and

II. Whether the CA erred in ruling that Multi-ware is not

entitled to the insurance proceeds.

The Petition lacks merit.

We stress, only questions of law may be raised in a Petition for

Review on Certiorari under Rule 45 of the Rules of Court since the Court
is not a trier of facts. While there are exceptions, as when the findings of
the appellate court are contrary to those of the trial court, these must be
alleged, substantiated, and proved by the parties so this Court may
evaluate and review the facts of the case. Granting that the case falls
under the exceptions, this alone does not automatically warrant a review
of factual findings by this Court. 46 In any event, the Court retains full
discretion on whether to review the factual findings of the CA.47

39
Id. at 188-208.
40
Id. at 94.
41
Id. at 376-377.
42
Id. at 387-388.
43
Id. at 392-493.
44
Id. at 355-365.
45
Id. at412-416.
46
Pascual v. Burgos, 776 Phil. 167, !88 (2016).
47
Id. at 169.

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 Resolution - 6- G.R. No. 204703
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Here, Multi-ware certainly raised questions of fact when it asked

the Court to resolve "whether there is preponderance of evidence that
there was co-insurance on properties covered by other existing insurance
contracts upon the same subject matter and with the same interest and
risk."48 However, Multi-ware failed to show that the factual findings of
the CA are without basis for the Court to reverse them. 49 Worse, Multi-
ware failed to attach to the petition such material portions of the record as
would support its claims in compliance with Rule 45, Sec. 4 of the Rules
of Court. 50 Hence, the finding of the CA shall be deemed conclusive.

That Multi-ware failed to disclose to Philgen the existence of other

insurance policies over the same subject matter, interest and risk in
violation of Condition 3 is supported by the evidence on record. Hence,
the CA conectly ruled that, for such violation, Multi-ware is not entitled
to the insurance proceeds.

Condition 3 requires the disclosure of existing insurance coverage

and those which may subsequently be effected, and provides that non-
disclosure in this regard entitles the insurer to avoid the policy. 51 This
stipulation is commonly known as "other insurance clause" (also called
"additional insurance" and "double insurance").52 It has been recognized
to be valid53 and sanctioned by Section 75 of the Insurance Code, which
provides that "[a] policy may declare that a violation of specified
provisions thereof shall avoid it x x x."54 Such condition is common in
fire insurance policies and is intended to prevent an increase in the moral
hazard, 55 i.e., opportunity to defraud the insurer.56 In order to constitute as
a violation, the other insurance must be upon the same subject matter,
interest, and risk. 57

In this case, it is clear from the Status/Valuation Report dated

December 20, 2001, which claims adjuster Dela Merced submitted to

48
Rollo, p. 30.
49
Pascual v. Burgos, supra note 46, at 19 1.
50
RULES OF COURT, Rule 45, Sec. 4. Contents of petition. - The petition shall be filed in e ighteen
( 18) copies, with the original copy intended for the court being indicated as such by the petitioner
and shall (a) state the full name of the appeal ing pa1iy as the petitioner and the adverse party as
respondent, without impleading the lower courts or judges thereof either as petitioners or
respondents; (b) indicate the material dates showing when notice of the judgment or final order or
resolution subject thereof was received, when a motion for new trial or reconsideration, if any, was
filed and when notice of the denial thereof was received: (c) set forth concisely a statement of the
matters involved, and the reasons or arguments relied on for the allowance of the petition; (d) be
accompanied by a clearly legible duplicate original, or a cetiified true copy of the judgment or final
order or resolution certified by the clerk of court of the court a quo and the requisite nun~ber of
plain copies thereof, and such material portions of the record as would support the petition; and
(e) contain a sworn certification against fornm shopping as provided in the last paragraph of section
2, Rule 42. (Emphasis supplied.)
51
American Home Assurance Co. 11. Chua, %8 Phil. 5'.i.\ 364-365 ( 1999).
52
Malayan Insurance Co., Inc. v. f'hiiippine Pirsl Insurance Co., Inc., 690 Phil. 621,635 (2012).
53
Geagoniav. CA, 311 Phil. 152. 164(i995).
54 Id.
55
Id.; and American Home 4.ssurance Cu. v. Chua. wura note 51. at 566.
56
Fortune lnsuranceandSure(rCo., Inc v. CA, 3i4 Phil. 184, 196(1995).
57
Geugonia v. CA. supra.

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 Resolution -7- G.R. No. 204703
February 17, 2021

Philgen, that Multi-ware "did not declare to Philgen that it was also
insured with the Reliance Surety and Insurance Company, Inc. under Fire
Policy No. 146092 dated February 8, 2001 in the amount of
Pl 0,000,000.00 over the same stocks covered by" 58 Philgen's insurance
policy. Multi-ware failed to refute this. It is also undisputed that Multi-
ware procured several other fire insurance policies, but failed to prove
that these insurance policies do not cover the same properties insured by
Philgen. Moreover, Multi-ware avers that it "agreed to secure additional
insurance for its m·achineries, equipment, raw materials and stocks" with
Prudential Guarantee because Ernesto assured Multi.,.ware "that he would
inform the other insurance companies of the co-insurance that would
arise." 59 This militates against Multi-ware's claim that Prudential
Guarantee's insurance did not cover the same subject matter, interest, and
risk with those insured with Philgen. In other words, blaming Ernesto for
the non-disclosure of the co-insurance constitutes an implied recognition
that the procurement of the insurance from Prudential Guarantee needed
to be disclosed as it will violate Condition 3.

In addition to these independent findings, we also take note of our

findings in the related case of Multi-ware Manufacturing Cmporation
and Multi-growth Corporation v. Prudential Guarantee and Assurance
Inc., and Ernesto Sy, doing business under the name and style of "Pan
Oceanic Services, "60 that the insurance policies which Multi-ware
procured from Asia Traders Insurance Corporation, Westen1 Guaranty
Corporation, and Cibeles Insurance Corporation covered the same
finished and unfinished stocks within Multi-ware's Building Nos. 2, 3, 4,
5, and 6 insured by Prudential Guarantee, thus:

Here, it was established that the petitioners [including Multi-

ware] violated Condition No. 3 of the Fire Insurance Policies, since it
procured insurances from other insurance companies without giving
notice to [Prudential Guarantee], or having the particulars of other
insurance endorsed on the policy pursuant to Section 50 of the
Insurance Code. The records showed that [Prudential Guarantee] was
not informed of the other insurances procured from other insurance
companies, such as Western Guaranty Corporation, Asia Traders
Corporation, and Cibeles Insurance.

Contrary to petitioners' claim, the other insurances they secured

cover the same subject matter with the same interest and risk as the one
contracted with [Prudential Guarantee]. FLMLAY00000174NA and
FLMLA Y00000284NA covering stocks of finished and unfinished,
raw materials, goods in process, packaging materials and supplies
usual to the insured's business within Building Nos. 2, 3, 4, 5, and 6.
The insured property encompasses those insured under the policy with

58
Rollo, p. 149.
59
Id. at 126.
"'' G.R. No. 240498, September 25. 20 l 9.

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 Resolution - 8- G.R. No. 204703
February 17, 2021

Cibeles Insurance, Asia Traders, and Western Guaranty. 61 (Citations

omitted.)

This reinforces the CA's finding that Multi-ware insured with

Prudential Guarantee and other insurance companies its finished and
unfinished stocks within Building Nos. 2 and 5, which are the same
properties insured by Philgen in this case.

Evidently, Multi-ware violated Condition 3 as Multi-ware procured

several insurance policies covering the same subject matter, interest, and
risk insured by Philgen; and Multi-ware admittedly did not disclose this
information to Philgen as it was expecting Ernesto to discharge such
obligation. Due to this breach, we agree with the CA that "all benefits
under [the] policy shall be deemed forfeited" in accordance with the
explicit stipulatio11 in Condition 3 or the "other insurance clause."

FOR THESE REASONS, the Petition is DENIED. The Decision

dated July 20, 2012 ·and Resolution dated November 19, 2012 of the
Court of Appeals in CA-G.R. CV No. 90304 are AFFIRMED.

SO ORDERED."

lerk of Court , r
28 MAY 2021 /' lt.f'
R & SLAW OFFICE (reg)
Counsel for Petitioner
Unit I I 03, Mani la Luxury Condominium
Pearl Dr. cor. Goldloop St. JU DGMENT DIVISION (x)
Ortigas Center, 1605 Pasig C ity Supre me Court, Manila

INOCENTES CANONIZADO FERRER & PUBLI C INFORMATION OFFICE (x)

ASSOC IATES LAW OFFICE (reg) LIBRARY SERVICES (x)
Counsel fo r Respondent Phil. General Insurance Corp . [For uploading pursuant to A.M. No. I 2-7-SC]
No. I 9 Marunong St., Central District
1 I 00 Q uezon City OFFICE OF THE CHIEF ATTORNEY (x)
OFFICE OF THE REPORTER (x)
SIBAYAN LUM BOS & ASSOCIATES PHILIPPINE JUDICIAL ACADEMY (x)
LAW OFFICE (reg) Supreme Court, Manila
Counsel for Respondent Ernesto Sy
G/F, A VR Bldg., Beaterio St. COURT OF APPEALS (x)
Intramuros, 1002 Manila Ma. Orosa Street
Ermita, 1000 Manila
HON. PRES IDING JUDGE (reg) CA-G.R. CV No. 90304
Regional Trial Court, Branch 20
Manila Please notify the Court of any change i11 your address.
(Civil Case No. 02-1 05314) GR204703.2/ 17/2021(203) URES

61 Id.

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