GEAGONIA vs. CA, COUNTRY BANKERS INSURANCE CORP.

FACTS: Armando Geagonia is the owner of Norman’s Mart and obtained from Country Bankers a fire
insurance policy which covered Stock-in-trade consisting of RTW dry goods. The policy contained a
provision where the insured must give notice to the insurer of any insurance or insurances already
affected 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 already insured by such policy otherwise it shall be
deemed forfeited, provided that such condition does not apply when the total insurance or insurances in
force at the time of the loss is not more than 200k Subsequently, a fire broke out and destroyed
Geagonia’s stocks-in-trade. Country bankers denied the claim because it was found that at the time of the
loss, the stocks were likewise covered by two other fire insurances for 100k each by PFIC. It had a
mortgage clause which stated that loss, if any, shall be payable to Cebu Tesing Textiles.

ISSUE: WON there was double insurance to justify denial of the claim

HELD: NO (Country Bankers is liable). It is a cardinal rule on insurance that a policy or insurance contract
is to be interpreted liberally in favor of the insured and strictly against the company, the reason being,
undoubtedly, to afford the greatest protection which the insured was endeavoring to secure when he
applied for insurance. Provisions, conditions, or exceptions in policies which tend to work a forfeiture of
insurance policies should be construed most strictly against those for whose benefits they are inserted,
and most favorably toward those against whom they are intended to operate. The condition in the policy
is commonly known as the additional or “other insurance” clause and has been upheld as valid and as a
warranty that no other insurance exists. Its violation would thus avoid the policy. However, in order to
constitute a violation, the other insurance must be upon the same subject matter, the same insurable
interest, and the same risk. As to a mortgaged property, the mortgagor and the mortgagee have each an
independent insurable interest therein and both interests may be one policy, or each may take out a
separate policy covering his interest, either at the same or separate times. The mortgagor’s insurable
interest covers the full value of the mortgaged property, even though the mortgage debt is equivalent to
the full value of the property. The mortgagee’s insurable interest is to the extent of the debt, since the
property is relied upon as security thereof, and in insuring he is not insuring the property but his interest
or lien thereon. A double insurance exists where the same person is insured by several insurers separately
in respect of the same subject and cover the same interest. Since the two policies of the PFIC do not cover
the same interest as that covered by the policy in issue, no double insurance exists. The non-disclosure is
not fatal. 11. Fortune Insurance and Surety Co., Inc. v. Court of Appeals Facts: On June 29, 1987, Producer’s
Bank of the Philippines’ armored vehicle was robbed, in transit, of seven hundred twenty-five thousand
pesos (Php 725,000.00) that it was transferring from its branch in Pasay to its main branch in Makati. To
mitigate their loss, they claim the amount from their insurer, namely Fortune Insurance and Surety Co.
Fortune Insurance, however, assails that the general exemption clause in the Casualty Insurance coverage
had a general exemption clause, to wit: