Filipinas Cia de Seguros v. Christern Huenfeld & Co. - Enemy Corporation

80 PHIL 54

Facts:

>  Oct. 1, 1941, Domestic Corp Christern, after payment of the premium, obtained from Filipinas, fire policy no. 29333 for P100T covering merchandise contained in a building located in Binondo.

>  On Feb. 27,  1942, during the Jap occupation, the building and the insured merchandise were burned.  Christern submitted to Filipinas its claim.

>  Salvaged goods were sold and the total loss of Christern was P92T.

>  Filipinas denied liability on the ground that Christern was an enemy corporation and cannot be insured.

Issue:

Whether or not Filipinas is liable to Christern, Huenfeld & Co.

Held:

NO.

Majority of the stockholders of Christern were German subjects.  This being so, SC ruled that said corporation became an enemy corporation upon the war between the US and Germany.  The Phil Insurance Law in Sec. 8 provides that anyone except a public enemy may be insured.  It stands to reason that an insurance policy ceases to be allowable as soon as an insured becomes a public enemy.

The purpose of the war is to cripple the power ad exhaust the resources of the enemy, and it is inconsistent that one country should destroy its enemy property and repay in insurance the value of what has been so destroyed, or that it should in such manner increase the resources of the enemy or render it aid.

All individuals who compose the belligerent powers, exist as to each other, in a state of utter exclusion and are public enemies.  Christern having become an enemy corporation on Dec. 10. 1941, the insurance policy issued in his favor on Oct. 1, 1941 by Filipinas had ceased to be valid and enforceable, and since the insured goods were burned after Dec. 10, 1941, and during the war, Christern was NOT entitled to any indemnity under said policy from Filipinas.

Elementary rules of justice require that the premium paid by Christern for the period covered by the policy from Dec. 10, 1941 should be returned by Filipinas.