2d xii. Lim Cuan Sy vs. Northern Ass. o.
, 55:248
Facts: A Chinese firm engaged in the business of selling textiles in the City of Manila. This
business was conducted indifferently, in Chinese fashion, under the names of "Hong Liong,"
"Lim Cuan Sy," and "Lim Cuan Sy & Co.,". The name "Lim Cuan Sy," one of the designations of
the business, is the name of one of the partners in the business, who actually owned, at the
time this action arose, about one-third of the business. The plaintiff acquired possession of the
interior compartment of the bodega. Here the plaintiff stored a large quantity of textiles prior
to November 23, 1926, upon which date he procured the policy of insuranceto be issued by the
local agent of the defendant insurance company in the amount of P10,000, insuring the effects
stored in said bodega, from loss by fire. At or about the same time additional policies of
P70,000 on the same stock of textiles were made. All of these policies were written in the name
of the plaintiff Lim Cuan Sy, as the insured.
On December 28, 1926, a destructive fire occurred in the Bodega, the destruction was so
complete that even the places occupied by the rows of boxes are not discernible in the
photographs taken of the ruins.
The Plaintiff’s claim of loss was disallowed by the insurer. The defenses urged in this instance by
the appellant revolve mainly around two propositions, namely, first, that there was a
misrepresentation by the insured as to the nature and extent of his interest in the insured
goods (due to the fact that the true owner of the insured goods was the mercantile entity Lim
Cuan Sy & Co., whereas the policies were written in the name of Lim Cuan Sy only), and,
secondly, that immediately prior to the fire, the plaintiff caused a large part of the goods to be
removed surreptitiously from the bodega and that the goods so removed were included in the
claim of loss, thereby rendering the claim fraudulent.
Issue: Whether or not there was a misrepresentation by the insured as to the nature and extent
of his interest in the insured goods.
Ruling: No misrepresentation. A policy insuring merchandise against fire is not invalidated by
the fact that the name of the insured policy is incorrectly written "Lim Cuan Sy" instead of "Lim
Cuan Sy & Co.," the latter being the proper legal designation of the firm, where it .appears that
the designation "Lim Cuan Sy" was commonly used as the name of the firm in its business
dealings and that the error in the designation of the insured in the policy was not due to any
fraudulent intent on the part of the latter and did not mislead the insurer as to the extent of the
liability assumed.
There is no question but that when this policy of insurance was written, the agent of the
company knew that he was insuring a stock of goods the identity of which was not in doubt,
and which pertained to a business commonly known as the business of Lim Cuan Sy; and
inasmuch as the defendant was content to take the premium corresponding to the insurance
on goods of the value of those then contained in the bodega, the company should not now be
permitted to escape responsibility merely upon the lack of conformity between the name used
in the policy and the true name of the legal entity existing under our law.
Issue: Whether the plaintiff, after having surreptitiously removed a great part of the insured
goods from the bodega already mentioned, falsified its claim and proof of loss by including the
goods so removed, with intent to defraud the insurer.
Ruling: No. The defense based upon fraud of the insured in submitting fraudulent proof 6f loss
was not sustained in the trial court, which gave judgment against the insurance company for
the amount of the policy. Held, upon appeal, that the finding of the trial court on this point
should be affirmed.
