Bonifacio Bros, Inc. vs. Mora
20 SCRA 261 (G.R. No. L-20853)
May 29, 1967
(Insurance Law)
Petitioners/Appellants:
Bonifacio Bros. Inc. et. al.
Respondent/Appellees:
Enrique Mora, et. al.
J.
Castro
FACTS
Enrique
Mora, owner of an Olds Mobile sedan model 1956, mortgaged the same to H.S.
Reyes Inc., with the condition that the former would insure the automobile with
the latter as beneficiary. The automobile was insured on June 23, 1959 with the
State Bonding & Insurance Co., Inc. and a motor car insurance was issued to
Enrique Mora
During
the effectivity of the insurance contract the car met an accident. Mora,
without knowledge of the H. S. Reyes Inc., authorized the Bonifacio Bros., Inc.
to repair the car with some materials supplied by the Ayala Autoparts Co.
ISSUE
Whether
there is privity of contract between the Bonifacio Bros. Inc and the Ayala
Autoparts Co. on the one hand and the insurance company on the other.
HELD
No.
A policy of insurance is a distinct and independent contract between the
insured and insurer. A third person has no right in law or equity to the
proceeds of an insurance unless there is a contract or trust, express or
implied between the insured and the third person.
The
Appellants are not mentioned in the contract as parties thereto, nor is there
any clause or provision thereof from which we can infer that there is an
obligation on the part of the insurance company to pay the cost directly to
them.
The
clause is an insurance policy, authorizing the owner of the damaged vehicle to
contract for its repairs does not mean that the repairman is entitled to
collect the cost of the repair out of the proceeds of the insurance. It merely
establishes the procedure that the insured has to follow in order to be
entitled to indemnity for repair.
On
the other hand, the “loss payable” clause of the insurance policy stipulates
“Loss, if any, is payable to H. S. Reyes, Inc.” indicating that it was
only the H. S. Reyes Inc. which intended to be benefited.
Where
the mortgagee is the beneficiary in a car insurance, it has a better right than
the repairman to the insurance proceeds.
