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    Gaisano Cagayan v. Ins. Co. of North America - Case Digest

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    Lulu Rodriguez
    This case discusses an insurance company's lawsuit against Gaisano Superstore to recover unpaid book debts of two clothing companies (IMC and LSPI) after a fire destroyed Gaisano's store. The trial court dismissed the case, finding the fire was accidental. However, the appellate court ruled Gaisano must pay the insurance company, as the insurance covered unpaid accounts, not lost goods. The Supreme Court affirmed, noting Gaisano's obligation was to pay money, not deliver goods, so the fortuitous fire did not relieve it of liability.

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    Gaisano Cagayan v. Ins. Co. of North America - Case Digest

    Uploaded by

    Lulu Rodriguez
    132 views2 pages
    This case discusses an insurance company's lawsuit against Gaisano Superstore to recover unpaid book debts of two clothing companies (IMC and LSPI) after a fire destroyed Gaisano's store. The trial court dismissed the case, finding the fire was accidental. However, the appellate court ruled Gaisano must pay the insurance company, as the insurance covered unpaid accounts, not lost goods. The Supreme Court affirmed, noting Gaisano's obligation was to pay money, not deliver goods, so the fortuitous fire did not relieve it of liability.

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    Gaisano Cagayan v. Ins. Co. of North America- Case Digest

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    This case discusses an insurance company's lawsuit against Gaisano Superstore to recover unpaid book debts of two clothing companies (IMC and LSPI) after a fire destroyed Gaisano's store. The trial court dismissed the case, finding the fire was accidental. However, the appellate court ruled Gaisano must pay the insurance company, as the insurance covered unpaid accounts, not lost goods. The Supreme Court affirmed, noting Gaisano's obligation was to pay money, not deliver goods, so the fortuitous fire did not relieve it of liability.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    132 views2 pages

    Gaisano Cagayan v. Ins. Co. of North America - Case Digest

    Uploaded by

    Lulu Rodriguez
    This case discusses an insurance company's lawsuit against Gaisano Superstore to recover unpaid book debts of two clothing companies (IMC and LSPI) after a fire destroyed Gaisano's store. The trial court dismissed the case, finding the fire was accidental. However, the appellate court ruled Gaisano must pay the insurance company, as the insurance covered unpaid accounts, not lost goods. The Supreme Court affirmed, noting Gaisano's obligation was to pay money, not deliver goods, so the fortuitous fire did not relieve it of liability.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    Gaisano Cagayan v. Ins. Co.

    of North America
    490 SCRA 286

    CASE DIGEST

    FACTS:

    IMC and Levi Strauss (Phils.) Inc. (LSPI) separately obtained from
    respondent fire insurance policies with book debt endorsements. The
    insurance policies provide for coverage on "book debts in connection with
    ready-made clothing materials which have been sold or delivered to
    various customers and dealers of the Insured anywhere in the
    Philippines."

    The policies defined book debts as the "unpaid account still appearing in
    the Book of Account of the Insured 45 days after the time of the loss
    covered under this Policy." The policies also provide for the following
    conditions:

    1. Warranted that the Company shall not be liable for any unpaid
    account in respect of the merchandise sold and delivered by the
    Insured which are outstanding at the date of loss for a period in
    excess of six (6) months from the date of the covering invoice or
    actual delivery of the merchandise whichever shall first occur.

    2. Warranted that the Insured shall submit to the Company within


    twelve (12) days after the close of every calendar month all amount
    shown in their books of accounts as unpaid and thus become
    receivable item from their customers and dealers.

    Gaisano is a customer and dealer of the products of IMC and LSPI. On


    February 25, 1991, the Gaisano Superstore Complex in Cagayan de Oro
    City, owned by petitioner, was consumed by fire. Included in the items
    lost or destroyed in the fire were stocks of ready-made clothing materials
    sold and delivered by IMC and LSPI.

    Insurance of America filed a complaint for damages against Gaisano. It


    alleges that IMC and LSPI were paid for their claims and that the unpaid
    accounts of petitioner on the sale and delivery of ready-made clothing
    materials with IMC was P2,119,205.00 while with LSPI it was
    P535,613.00.

    The RTC rendered its decision dismissing Insurance's complaint. It held


    that the fire was purely accidental; that the cause of the fire was not
    attributable to the negligence of the petitioner. Also, it said that IMC and
    LSPI retained ownership of the delivered goods and must bear the loss.
    The CA rendered its decision and set aside the decision of the RTC. It
    ordered Gaisano to pay Insurance the P 2 million and the P 500,000 the
    latter paid to IMC and Levi Strauss. Hence this petition.

    ISSUE:

    Whether or not petitioner is liable for the unpaid accounts.

    RULING:

    Petitioner's argument that it is not liable because the fire is a fortuitous


    event under Article 117432 of the Civil Code is misplaced. As held earlier,
    petitioner bears the loss under Article 1504 (1) of the Civil Code.
    Moreover, it must be stressed that the insurance in this case is not for
    loss of goods by fire but for petitioner's accounts with IMC and LSPI that
    remained unpaid 45 days after the fire. Accordingly, petitioner's obligation
    is for the payment of money. As correctly stated by the CA, where the
    obligation consists in the payment of money, the failure of the debtor to
    make the payment even by reason of a fortuitous event shall not relieve
    him of his liability.

    The rationale for this is that the rule that an obligor should be held
    exempt from liability when the loss occurs thru a fortuitous event only
    holds true when the obligation consists in the delivery of a determinate
    thing and there is no stipulation holding him liable even in case of
    fortuitous event. It does not apply when the obligation is pecuniary in
    nature.

    Under Article 1263 of the Civil Code, "in an obligation to deliver a generic


    thing, the loss or destruction of anything of the same kind does not
    extinguish the obligation." This rule is based on the principle that the
    genus of a thing can never perish. An obligation to pay money is generic;
    therefore, it is not excused by fortuitous loss of any specific property of
    the debtor.

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