ALIM, Sittie Hashaira K.

G.R. No. 44119

Issues:
1. Whether the rights to insurance policies of a firm are transmitted to a new one
substituting the former?
2. Whether the defendant companies are liable to pay the insurance policies to the
plaintiffs?

Arguments made and evidence filed by the defendants (Baloise Fire Insurance Co., Sun
Insurance Office Ltd., and Springfield Insurance Co., represented by Kuenzel & Streiff, Inc.):
 On July 25 and August 15, 1933, the defendant insurance companies issued insurance
policies in the total amount of ₱25,000 in the name of Sharruf & Co., issued an
additional policy in the sum of ₱15,000 in favor of the said firm, raising the total amount
of the insurance to ₱40,000.
 On September 22, 1933, a fire broke out of the plaintiff company’s storage building that
caused the loss of their merchandise. The defendants call attention to the earthen pots,
the first found by Detective Manalo beside the railing of the stairways of the upper floor
and the second one found by detective Irada on the first floor, both containing liquid,
ashes and other residues which smelled of petroleum; a red rag found by detective Irada
in front of the toilet; partially burnt box; and the old can containing garbage.
 It is alleged by them that the total value of the textiles contained in cases deposited
inside the building when the partnership was formed was ₱12,000; that of the only fancy
jewelry with imitation stones from ₱15,000 to ₱17,000, and that of the kitchen tinsils and
tableware made of aluminium, bronze and glass ₱19,676.
 As the plaintiffs claim, they had already sold articles, mostly textiles, valued at ₱8,000, a
small quantity of cloth must have been left at the time the fire occurred. However, in the
defendants’ claim, the textiles allegedly consumed by fire and damaged by water
assessed them at ₱12,000.
 Of the kitchen utensils and tableware made of aluminium, bronze and glass, of which
according to the plaintiffs, they had a stock valued at ₱10,676, there were found after the
fire articles worth only ₱1,248.80.
 The same may be said of the fancy jewels with imitation stones, and others of which the
fancy jewels with imitation stones, and others of which the plaintiffs claim to have had a
stock worth from ₱15,000 to ₱17,000 at the time of the fire, of which only valued at
₱3,471.16, were left after the fire.
  According to the inventory made by White & Page, adjusters of the insurance
companies, the total value thereof, aside from the articles not included in the inventories,
assessed at ₱744.50, amounts to only ₱8,077.35.

Arguments made and evidence filed by the petitioner (Sharruf & Co., known also as Sharruf &
Eskenazi, Salomon Sharruf and Elias Eskenazi):
 In June and July 1933, plaintiffs Salomon Sharruf and Elias Eskenazi were doing
business under the firm name Sharruf & Co. They applied for insurance of their
merchandise at the defendant companies.
 On June 26, 1933, the plaintiffs executed a contract of partnership between themselves
wherein they substituted the name of their firm with Sharruf & Eskenazi stating that Elias
Eskenazi contributed to the partnership, as his capital, goods valued at ₱26,299.94. it
was likewise stated in said contract that Salomon Sharruf brought to said partnership, as
his capital, goods valued at ₱24,205.10. The total value of the merchandise contributed
by both partners amounted to ₱50,505.04.
 The last time the plaintiffs were in the building was on September 19, 1933 at 4 o’clock
in the afternoon. At about 12:41 on the morning of September 22, 1933, a fire broke out
of the plaintiff company’s storage building that caused the loss of their merchandise.
 Plaintiffs filed insurance claims against the defendant companies but the latter refused to
pay contending that the insurance policies were issued for the firm name Sharruf & Co.
and not for Sharruf & Eskenazi.
 The plaintiffs claim that when the fire took place there where in the burnt building articles
and merchandise in the total amount of the insurance policies and that the textiles and
other damaged and undamaged goods found in the building after the fire were worth
₱40,000.

Decision of the Supreme Court:

In the present case, while it is true that the defendant companies issued the policies to
the firm name Sharruf & Co, changing the name to Sharruf & Ezkenazi did not change
the membership of the partnership in question. The same and only members of the
former Salomon Sharruf and Elias Eskenazi are also members of the latter. It did not
appear that in changing the name of the partnership, there was intent in defrauding the
defendant companies.

When the partners of a general partnership doing business under the firm name “Sharruf
& Co.” obtained insurance policies issued to said firms and the latter is afterwards
changed to “Sharruf & Eskenazi,” which are the names of the said firm, continuing the
same business, the new firm acquires the rights of the former under the same policies.

Therefore, the rights to the insurance claims of the firms of the firm under the name
“Sharruf & Co.” are transferred to the substitute “Sharruf & Eskenazi”.
2. No, it was found that the plaintiffs committed “fraudulent claim” against the defendant
companies when the amount of articles that they claimed to have been in the building
before the fire had a great difference with the amount shown by the vestige of the fire to
have been therein.

By the express agreement between the insurer and the insured, “fraudulent claim” is a
ground for exemption of the insurers from civil liability.

Therefore, the defendant companies were absolved from the complaint.