THIRD DIVISION

[G.R. No. 230528. February 1, 2021.]

MULTI-WARE MANUFACTURING CORPORATION , petitioner, vs.

CIBELES INSURANCE CORPORATION, WESTERN GUARANTY
CORPORATION, and ERNESTY SY, doing business under the
name and style "PAN OCEANIC INSURANCE SERVICES" ,
respondents.

DECISION

HERNANDO, J : p

This Petition for Review on Certiorari 1 assails the November 29, 2016
Decision 2 and the March 9, 2017 Resolution 3 of the Court of Appeals (CA) in
CA-G.R. CV No. 106334, affirming the August 26, 2015 Joint Decision 4 of the
Regional Trial Court (RTC) of Manila, Branch 25 in Civil Case Nos. 02-105291
and 02-105317.
The undisputed facts are as follows:
Petitioner Multi-Ware Manufacturing Corporation (Multi-Ware) is a
domestic corporation engaged in the manufacture of various plastic
products. 5 On December 14, 1999, petitioner took out Fire Policy Insurance
No. 50-118320 from respondent Western Guaranty Corporation (Western
Guaranty) in the amount of P10,000,000.00. The properties insured were the
pieces of machinery and equipment, tools, spare parts and accessories
stored at Buildings 1 and 2, PTA Compound, No. 26 Isidro Francisco Street,
Malinta, Valenzuela, Metro Manila. 6
On February 20, 2000, petitioner secured another fire insurance policy,
this time from respondent Cibeles Insurance Corporation (Cibeles Insurance)
under Fire Insurance Policy No. 80-43032 for P7,000,000.00, covering the
pieces of machinery and equipment, tools, spare parts and accessories
excluding mold, and stocks of manufactured goods and/or goods still in
process, raw materials and supplies found in the PTA Central Warehouse
Compound, Building 1, No. 26 Isidro Francisco Street, Brgy. Vicente Reales,
Dalandan, Valenzuela, Metro Manila. 7
Subsequently, petitioner obtained from Prudential Guarantee Corp.
(Prudential Guarantee) Fire Insurance Policy Nos. FLMLAY 00000174NA and
FLMLAY 00000284NA 8 covering the same machinery and equipment located
at Building 1, PTA Compound, No. 26 Francisco St., Malinta, Valenzuela,
Metro Manila. cDHAES

On April 21, 2000, a fire broke out in the PTA Compound causing
damage and loss on the properties of petitioner covered by the fire
insurance policies. Consequently, petitioner filed insurance claims with
respondents Cibeles Insurance and Western Guaranty, but these were
CD Technologies Asia, Inc. © 2021 cdasiaonline.com
 denied on the ground of Multi-Ware's violation of Policy Condition Nos. 3, on
non-disclosure of co-insurance; 15, on fraudulent claims; and 21, on arson. 9
Its insurance claims for payment having been denied by Cibeles
Insurance and Western Guaranty, petitioner filed separate civil actions
against these insurance companies before the RTC of Manila. These cases
were eventually consolidated for trial. 10
Ruling of the Regional Trial Court:
On August 26, 2015, the RTC rendered its Joint Decision, the dispositive
portion of which reads:
WHEREFORE, in the light of the foregoing, considering that
plaintiff violated Policy Condition No. 3 of Fire Insurance Policy No. 50-
118230 issued by defendant Western Guaranty and Fire Insurance
Policy No. 80-43032 issued by defendant Cibeles, all the benefits due
to plaintiff under the policies are deemed forfeited.
These two complaints are therefore, ordered DISMISS[ED] for
lack of merit.
Likewise, the counter-claims of the defendants are dismissed.
No cost.
SO ORDERED. 11 (Emphasis supplied)
Multi-Ware filed a motion for reconsideration but it was denied by the
RTC in an Order 12 dated January 8, 2016.
Ruling of the Court of Appeals:
On appeal, the CA sustained the RTC judgment, viz.:
WHEREFORE, premises considered, the appeal of Multi-Wave
Manufacturing Corporation is hereby DENIED for lack of merit.
Accordingly, the Joint Decision dated 26 August 2015 and Order dated
8 January 2016 of the RTC in Civil Case Nos. 02-105291 & 02-105317
are AFFIRMED.
SO ORDERED. 13

Petitioner's motion for reconsideration was denied by the CA in a

Resolution dated March 9, 2017. Hence, this petition before Us.
Issues:
This petition which is hinged on the following grounds:
I. THE HONORABLE [CA] SERIOUSLY ERRED IN HOLDING THAT
PETITIONER VIOLATED POLICY CONDITION NO. 3, DESPITE UTTER
LACK OF COMPETENT EVIDENCE TO SUPPORT RESPONDENTS'
STANCE;
II. THE HONORABLE [CA] SERIOUSLY ERRED IN HOLDING THAT
POLICY CONDITION NO. 3 APPLIES TO MACHINERIES, EQUIPMENT
AND TOOLS. 14
Stated otherwise, the issue is whether petitioner violated Policy
Condition No. 3 or the "other insurance clause" uniformly contained in the
subject insurance contracts resulting to avoidance of the said policies.
CD Technologies Asia, Inc. © 2021 cdasiaonline.com
 Our Ruling
We deny the Petition for lack merit.
Policy Condition No. 3 reads:
3. The insured shall give notice to the Company of any insurance
or insurances already effected, or which may 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 or on behalf of the
company before the occurrence of any loss or damage, all benefits
under this policy shall be deemed forfeited, provided however, that
this 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.
15 cTDaEH

Petitioner insists that there was no violation of Policy Condition No. 3

when it did not disclose to Cibeles Insurance and Western Guaranty the
existence of the other insurance policies that it procured covering its
machinery and equipment since said condition only prohibits non-disclosure
of co-insurance on stocks in trade, goods in process and inventories.
We do not agree.
Policy Condition No. 3 is clear that it obligates petitioner, as insured, to
notify the insurer of any insurance effected to cover the insured items which
involve any of its property or stocks in trade, goods in process and/or
inventories and that non-disclosure by the insured of other insurance policies
obtained covering these items would result in the forfeiture of all the
benefits under the policy. To be regarded as a violation of Policy Condition
No. 3, the other existing but undisclosed policies must be upon the same
matter and with the same interest and risk.
The records of this case show that petitioner obtained fire insurance
policies from Cibeles Insurance simultaneously with Western Guaranty and
Prudential Guarantee covering the same matter and the same risk, i.e., the
policies uniformly cover fire losses of petitioner's machinery and equipment.
Although Policy Condition No. 3 does not specifically state "machinery and
equipment" as among the subject of disclosure, it is apparent that the
disclosure extends to pieces of machinery and equipment as well since
Policy Condition No. 3 speaks of disclosure of other insurance obtained
covering "any of the property."
The word "property" is a generic term. Hence, it could include
machinery and equipment which are assets susceptible of being insured.
Inasmuch as machinery and equipment are included under the term
"property," petitioner must give notice to the insurer of any other fire
insurance policies on said machinery and equipment. As established during
trial, petitioner did not notify Cibeles Insurance and Western Guaranty that it
had procured other fire insurance policies covering its property consisting of
the same machinery and equipment. Consequently, the insurers could
validly deny the insurance claim of petitioner for violation of Policy Condition
CD Technologies Asia, Inc. © 2021 cdasiaonline.com
 No. 3.
In American Home Assurance Company v. Chua, 16 the Court held that
where the insurance policy specifies as a condition the disclosure of existing
co-insurers, non-disclosure thereof is a violation that entitles the insurer to
avoid the policy. This condition is common in fire insurance policies and is
known as the "other insurance clause." cSaATC

I n Geagonia v. Court of Appeals, 17 the Court explained that the

rationale behind the incorporation of "other insurance" clause in fire policies
is to prevent over-insurance and thus avert the perpetration of fraud. When
a property owner obtains insurance policies from two or more insurers in a
total amount that exceeds the property's value, the insured may have an
inducement to destroy the property for the purpose of collecting the
insurance. The public as well as the insurer is interested in preventing a
situation in which a fire would be profitable to the insured.
Petitioner contends that the insurers in this case failed to prove by
preponderance of evidence that the insurance policies it procured from them
covered the same subject matter. It insists that the findings of the courts
below that the properties insured under the policies obtained by petitioner
from the three insurance firms were one and the same since they were all
located in the same place, is unsubstantiated by the evidence and grounded
entirely on surmises or conjectures. This is not so.
In ruling that the properties subject of the insurance policies obtained
by petitioner from different insurers were identical, the RTC correctly held
that:
"[A]nent to the Fire Insurance Policy Nos. FLMLAY 00000175NA
(Exhibits '4' to '4-G') and FLMLAY 00000283NA (Exhibits '5' to '5-G')
procured by plaintiff from Prudential Guarantee on its machineries
and equipment located at Building 1, defendant Western Guaranty
and defendant Cibeles alleged that plaintiff failed to disclose or notify
them of these fire insurance policies taken from Prudential
Guarantee.
An examination of these two fire insurance policies issued by
Prudential Guarantee to the plaintiff, reveals that the property subject
of insurance are machineries and equipment located at Building 1,
PTA Compound, No. 26 Francisco St. Malinta, Valenzuela, Metro
Manila. Likewise, the properties subject of insurance in the fire
insurance policies issued by Western Guaranty are machineries and
equipment located at Warehouse 1 & 2 within PTA Compound, No. 26
Isidro Francisco Street, Malinta, Valenzuela, M.M. and machineries
and equipment insured by defendant Cibeles were contained in
Building 1, within Phil. Tobacco Adm. Central Warehouse Cpd. along
No. 26 Isidro Francisco St. Brgy. Vicente Reales, Dalandanan,
Valenzuela, M.M.
Based on the foregoing, the court finds that the properties such
as the machineries and equipment subject of these four insurance
policies are one and the same properties considering that the location
of these machineries and equipment are all contained in Building 1
within the PTA Compound. The allegation therefore of the plaintiff
CD Technologies Asia, Inc. © 2021 cdasiaonline.com
 that the properties mentioned in all the insurance policies are not the
same properties holds no water. Thus, for failure of the plaintiff to
disclose to defendants Western Guaranty and Cibeles of the fire
insurance policies it procured over its machineries and equipment
from Prudential Guarantee and vice-versa, the plaintiff has violated
Policy Condition No. 3 of its insurance policies." 18
cHDAIS

Well-entrenched in jurisprudence is the rule that factual findings of the

trial court, especially when affirmed by the appellate court, are accorded the
highest degree of respect and considered conclusive between the parties,
save for certain exceptional and meritorious circumstances, such as: (1)
when the findings of a trial court are grounded entirely on speculation,
surmises or conjectures; (2) when a lower court's inference from its factual
findings is manifestly mistaken, absurd or impossible; (3) when there is
grave abuse of discretion in the appreciation of facts; (4) when the findings
of the appellate court go beyond the issues of the case, or fail to notice
certain relevant facts which, if properly considered, will justify a different
conclusion; (5) when there is a misappreciation of facts; (6) when the
findings of fact are conclusions without mention of the specific evidence on
which they are based, are premised on the absence of evidence, or are
contradicted by evidence on record. 19 Not one of these exceptional
circumstances is present in this case.
As discussed earlier, it is apparent that Policy Condition No. 3, or the
"other insurance clause," was violated since petitioner failed to notify the
insurers of the fire insurance policies it procured from the different insurers
covering the same subject and interest. Petitioner utterly failed to disprove
the RTC's reasonable conclusion that the machinery and equipment covered
by all the fire insurance policies were identical considering that all these
properties were located in the same building inside the PTA Compound. It is
significant to note that aside from its bare allegations, petitioner did not
adduce adequate proof to show that the buildings and/or warehouses
referred to in each of the policies pertain to distinct and separate structures
inside the PTA Compound.
Since the policy procured by petitioner from Cibeles Insurance covered
the same subject and interest as that covered by the policies issued by
Western Guaranty and Prudential Guarantee, the existence of other
insurance policies referred to under Policy Condition No. 3 is undeniable. The
non-disclosure of these policies to the insurers was fatal to petitioner's right
to recover on the insurance policies.
WHEREFORE, the petitions are DENIED for lack of merit. The
November 29, 2016 Decision and March 9, 2017 Resolution of the Court of
Appeals in CA-G.R. CV No. 106334 are hereby AFFIRMED. Costs on the
petitioner.
SO ORDERED.
Leonen, Inting, Delos Santos and J.Y. Lopez, JJ., concur.

Footnotes
CD Technologies Asia, Inc. © 2021 cdasiaonline.com
 1. Rollo , pp. 11-44.

2. Id. at 46-60; penned by Associate Justice Agnes Reyes-Carpio and concurred in

by then Presiding Justice Andres B. Reyes, Jr. (now a retired member of this
Court) and Associate Justice Romeo F. Barza.

3. Id. at 80-82; penned by Associate Justice Romeo F. Barza and concurred in by

Presiding Justice Andres B. Reyes, Jr. (now a retired member of this Court)
and Associate Justice Rodil V. Zalameda (now a member of this Court).
4. Id. at 154-186; penned by Presiding Judge Marlina M. Manuel.

5. Id. at 12.

6. Id. at 47.
7. Id.
8. See id. at 206.
9. Id. at 47.
10. Id.

11. Id. at 186.

12. See id. at 49.
13. Id. at 60.
14. Id. at 26.
15. Id. at 50.

16. 368 Phil. 555 (1999).

17. 311 Phil. 152 (1995).
18. Rollo , p. 179.
19. Philippine Health-Care Providers, Inc. (MAXICARE) v. Estrada, 566 Phil. 603,
609-610 (2008), citing Ilao-Quianay v. Mapile, 510 Phil. 736 (2005).

CD Technologies Asia, Inc. © 2021 cdasiaonline.com