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Insurance Fraud Case: Sharruf v. Baloise

Sharruf & Co., a partnership, insured stock worth $40,000 with three insurance companies. After a fire, they claimed $40,000 in losses but only 10-11 burned cases were found. The trial court ordered the insurance companies to pay, but the Supreme Court reversed, finding that Sharruf & Co. committed insurance fraud by deliberately overstating losses. While changing the partnership name did not invalidate the policies on its own, presenting fraudulent claims violated the insurance agreements. The insurance companies were absolved of the payment.

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Rosemarie Barnido Madarang
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104 views2 pages

Insurance Fraud Case: Sharruf v. Baloise

Sharruf & Co., a partnership, insured stock worth $40,000 with three insurance companies. After a fire, they claimed $40,000 in losses but only 10-11 burned cases were found. The trial court ordered the insurance companies to pay, but the Supreme Court reversed, finding that Sharruf & Co. committed insurance fraud by deliberately overstating losses. While changing the partnership name did not invalidate the policies on its own, presenting fraudulent claims violated the insurance agreements. The insurance companies were absolved of the payment.

Uploaded by

Rosemarie Barnido Madarang
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd

Insurance Case Digest: Sharuff & Co. v.

Baloise Fire Insurance Co. (1937)


G.R. No. 44119

March 30, 1937

Lessons Applicable: Effect of Lack of Insurable Interest (Insurance)


Laws Applicable:
FACTS:

Salomon Sharruf and Elias Eskenazi were doing business


under the firm name of Sharruf & Co. They insured their
stocks with aloise Fire Insurance Co., Sun Insurance Office
Ltd.,
and
Springfield
Insurance
Co.
raising
it
to P40,000. Elias Eskenazi having paid the corresponding
premiums
Soon they changed the name of their partnership to Sharruf
& Eskenazi
September 22, 1933: A fire ensued at their building
at Muelle de la Industria street where petroleum was spilt
lasting 27 minutes
Sharruf & Co. claimed 40 cases when only 10 or 11 partly
burned and scorched cases were found
RTC: ordered Baloise Fire Insurance Co., Sun Insurance
Office Ltd., and Springfield Insurance Co., to pay the
partners Salomon Sharruf and Elias Eskenazi P40,000 plus
8% interest
ISSUE: W/N Sharruf & Eskenazi has juridical personality and
insurable interest
HELD: YES. Reversd. Insurance companies are absolved.

It does not appear that in changing the title of the


partnership they had the intention of defrauding the
insurance companies
fire which broke out in the building at Nos. 299-301 Muelle
de la Industria, occupied by Sharruf & Eskenazi but no
evidence sufficient to warrant a finding that they are
responsible for the fire
So great is the difference between the amount of articles
insured, which the plaintiffs claim to have been in the
building before the fire, and the amount thereof shown by
the vestige of the fire to have been therein, that the most
liberal human judgment can not attribute such difference to
a mere innocent error in estimate or counting but to a
deliberate intent to demand of the insurance companies
payment of an indemnity for goods not existing at the time
of the fire, thereby constituting the so-called "fraudulent
claim" which, by express agreement between the insurers
and the insured, is a ground for exemption of the insurers
from civil liability
acted in bad faith in presenting a fraudulent claim, they are
not entitled to the indemnity claimed
when the partners of a general partnership doing business
under the firm name of "Sharruf & Co." obtain insurance
policies issued to said firm and the latter is afterwards
changed to "Sharruf & Eskenazi", which are the names of
the same and only partners of said firm "Sharruf & Co.",
continuing the same business, the new firm acquires the
rights of the former under the same policies;

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