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    Qua Chee Gan Vs Law Union and Rock Insurance Co., LTD

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    Jay Shelle
    This document discusses warranties in insurance contracts and summarizes a court case between Qua Chee Gan and Law Union and Rock Insurance Co. regarding fire damage to warehouses. Key points: 1) Warranties in insurance contracts can relate to past, present or future and no specific words are needed to create a warranty. 2) The case involved fire damage to Qua Chee Gan's warehouses which were insured by Law Union. Law Union refused payment citing violations of the contract. 3) The court found that Law Union was estopped from denying payment as it had previously accepted premiums with knowledge of issues. The contract was also ambiguous and construed against Law Union.

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    Qua Chee Gan Vs Law Union and Rock Insurance Co., LTD

    Uploaded by

    Jay Shelle
    31 views1 page
    This document discusses warranties in insurance contracts and summarizes a court case between Qua Chee Gan and Law Union and Rock Insurance Co. regarding fire damage to warehouses. Key points: 1) Warranties in insurance contracts can relate to past, present or future and no specific words are needed to create a warranty. 2) The case involved fire damage to Qua Chee Gan's warehouses which were insured by Law Union. Law Union refused payment citing violations of the contract. 3) The court found that Law Union was estopped from denying payment as it had previously accepted premiums with knowledge of issues. The contract was also ambiguous and construed against Law Union.

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    Aug16

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    This document discusses warranties in insurance contracts and summarizes a court case between Qua Chee Gan and Law Union and Rock Insurance Co. regarding fire damage to warehouses. Key points: 1) Warranties in insurance contracts can relate to past, present or future and no specific words are needed to create a warranty. 2) The case involved fire damage to Qua Chee Gan's warehouses which were insured by Law Union. Law Union refused payment citing violations of the contract. 3) The court found that Law Union was estopped from denying payment as it had previously accepted premiums with knowledge of issues. The contract was also ambiguous and construed against Law Union.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    31 views1 page

    Qua Chee Gan Vs Law Union and Rock Insurance Co., LTD

    Uploaded by

    Jay Shelle
    This document discusses warranties in insurance contracts and summarizes a court case between Qua Chee Gan and Law Union and Rock Insurance Co. regarding fire damage to warehouses. Key points: 1) Warranties in insurance contracts can relate to past, present or future and no specific words are needed to create a warranty. 2) The case involved fire damage to Qua Chee Gan's warehouses which were insured by Law Union. Law Union refused payment citing violations of the contract. 3) The court found that Law Union was estopped from denying payment as it had previously accepted premiums with knowledge of issues. The contract was also ambiguous and construed against Law Union.

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    Sec. 67. A warranty is either expressed or implied.

    Sec. 68. A warranty may relate to the past, the present, the future, or to any or all of these.
    Sec. 69. No particular form of words is necessary to create a warranty.
    Sec. 70. Without prejudice to section fifty-one, every express warranty, made at or before the execution of
    a policy, must be contained in the policy itself, or in another instrument signed by the insured and referred
    to in the policy as making a part of it.
    Sec. 71. A statement in a policy of matter relating to the person or thing insured, or to the risk, as a fact, is
    an express warranty thereof.
    Sec. 72. A statement in a policy which imparts that it is intended to do or not to do a thing which materially
    affects the risk, is a warranty that such act or omission shall take place.
    Sec. 73. When, before the time arrives for the performance of a warranty relating to the future, a loss
    insured against happens, or performance becomes unlawful at the place of the contract, or impossible, the
    omission to fulfill the warranty does not avoid the policy.
    Sec. 74. The violation of a material warranty, or other material provision of a policy, on the part of either
    party thereto, entitles the other to rescind.
    Sec. 75. A policy may declare that a violation of specified provisions thereof shall avoid it, otherwise the
    breach of an immaterial provision does not avoid the policy.
    Sec. 76. A breach of warranty without fraud merely exonerates an insurer from the time that it occurs, or
    where it is broken in its inception, prevents the policy from attaching to the risk.
    QUA CHEE GAN VS LAW UNION AND ROCK INSURANCE CO., LTD.
    98 Phil. 85 Mercantile Law Insurance Law Ambiguity Contract of Adherence
    Qua Chee Gan owns four warehouses in Albay. He was using these warehouses to house crops like copra
    and hemp. All warehouses were insured by Law Union and Rock Insurance for the amount of P370,000.00.
    The insurance states that Qua Chee Gan should install 11 hydrants in the warehouses premises. Qua Chee
    Gan installed only two, but Law Union nevertheless went on with the insurance policy and collected
    premiums from Qua Chee Gan. The insurance contract also provides that oil should not be stored within
    the premises of the warehouses.
    In 1940, three of the warehouses were destroyed by fire. The damage caused amounted to P398k. Qua
    Chee Gan demanded insurance pay from Law Union but the latter refused as it alleged that after
    investigation from their part, they found out that Qua Chee Gan caused the fire. Law Union in fact sued
    Qua Chee Gan for Arson.
    Qua Chee Gan was acquitted in the arson case. He then demanded that Law Union pay up. This time, Law
    Union averred that the insurance contract is void because Qua Chee Gan failed to install 11 hydrants; and
    that gasoline was found in one of the warehouses.
    ISSUE: Whether or not the insurance contract is void.
    HELD: No. Law Union cannot exempt itself from paying Qua Chee Gan because it is estopped from invoking
    the same. It is a well settled rule of law that an insurer which with knowledge of facts entitling it to treat a
    policy as no longer in force, receives and accepts a premium on the policy, estopped to take advantage of
    the forfeiture.
    Also, gasoline is not one of those items specifically prohibited from the premises of the warehouses. What
    was mentioned was the word oil which could mean anything (from palm oil to lubricant and not gasoline
    or kerosene). This ambiguity is to be interpreted against Law Union because a contract of insurance is a
    contract of adhesion. Further, oil is incidental to Qua Chee Gans business, it being used for motor fuel.

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