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  • Verendia v. CA

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    Verendia's home was insured by multiple insurers including Fidelity. After a fire destroyed the home, Verendia filed a claim with Fidelity but they refused payment, arguing over-insurance and that Verendia presented a fraudulent lease with a different lessee's name. The Court held that by submitting a false document, Verendia forfeited all benefits under the insurance policy per the policy terms. The Court also found that Fidelity did not agree to settle by submitting an incomplete subrogation receipt in evidence. The petition against Fidelity's refusal of payment was dismissed.

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    Verendia's home was insured by multiple insurers including Fidelity. After a fire destroyed the home, Verendia filed a claim with Fidelity but they refused payment, arguing over-insurance and that Verendia presented a fraudulent lease with a different lessee's name. The Court held that by submitting a false document, Verendia forfeited all benefits under the insurance policy per the policy terms. The Court also found that Fidelity did not agree to settle by submitting an incomplete subrogation receipt in evidence. The petition against Fidelity's refusal of payment was dismissed.

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    98 views2 pages

    Verendia v. CA

    Uploaded by

    dyosa
    Verendia's home was insured by multiple insurers including Fidelity. After a fire destroyed the home, Verendia filed a claim with Fidelity but they refused payment, arguing over-insurance and that Verendia presented a fraudulent lease with a different lessee's name. The Court held that by submitting a false document, Verendia forfeited all benefits under the insurance policy per the policy terms. The Court also found that Fidelity did not agree to settle by submitting an incomplete subrogation receipt in evidence. The petition against Fidelity's refusal of payment was dismissed.

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    © All Rights Reserved
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    of 2

    RAFAEL “REX” VERENDIA v. COURT OF APPEALS and FIDELITY & SURETY CO.

    G.R. No. 75605 January 22, 1993

    MELO, J.:

    PRINCIPLE: INTERPRETATION OF INSURANCE CONTRACTS


    FACTS:
    Petitioner Rafael Verendia's residential building was insured with Fidelity and Surety Insurance
    Company and two others, Country Bankers Insurance and Development Insurance, with Monte de Piedad
    & Savings Bank as beneficiary. The insured building was completely destroyed by fire. With this, petitioner
    claim for the insurance on which Fidelity refused to give depending on its issued Fire Insurance Policy F-
    1887. Fidelity, among other things, averred that the policy was avoided by reason of over-insurance, that
    Verendia maliciously represented that the building at the time of the fire was leased under a contract
    executed on 25 June 1980 to a certain Roberto Garcia, when actually it was a Marcelo Garcia who was the
    lessee.

    ISSUE:
    WON Verendia forfeited all benefits due to his presentation of a false declaration (contract signed
    by Roberto, when in fact it was Marcelo Garcia who signed it) to support his claim.

    HELD:
    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.
    Based on previously decided cases: Basically a contract of indemnity, 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 foregoing discussion pointing to the fact that Verendia used a false lease
    contract to support his claim under Fire Insurance Policy No. F-18876, 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.”
    There is also no reason to conclude that by submitting the subrogation receipt as evidence in court,
    Fidelity bound itself to a "mutual agreement" to settle Verendia's claims in consideration of the amount of
    P142,685.77. While the said receipt appears to have been a filled-up form of Fidelity, no representative of
    Fidelity had signed it. It is even incomplete as the blank spaces for a witness and his address are not filled
    up. More significantly, the same receipt states that Verendia had received the aforesaid amount. However,
    that Verendia had not received the amount stated therein, is proven by the fact that Verendia himself filed
    the complaint for the full amount of P385,000.00 stated in the policy. It might be that there had been efforts
    to settle Verendia's claims, but surely, the subrogation receipt by itself does not prove that a settlement had
    been arrived at and enforced. Thus, to interpret Fidelity's presentation of the subrogation receipt in evidence
    as indicative of its accession to its "terms" is not only wanting in rational basis but would be substituting the
    will of the Court for that of the parties.

    DISPOSITIVE PORTION:
    WHEREFORE, the petition in G.R. No. 75605 is DISMISSED. The petition in G.R. No. 76399 is
    GRANTED and the decision of the then Intermediate Appellate Court under review is REVERSED and SET
    ASIDE and that of the trial court is hereby REINSTATED and UPHELD.

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