G.R. No. 89741 – SUN INSURANCE OFFICE, LTD., petitioner, vs. COURT OF APPEALS and EMILIO TAN, respondents.
PARAS, J.
Rule Synopsis
The prescriptive period for filing a complaint for the recovery of insurance proceeds is reckoned from the time the insured learned of the insurer’s denial of the claim, i.e. the time when the cause of action accrues.
Facts
Emilio Tan took a property insurance policy to cover his interest in the electrical supply store of his brother from Sun Insurance Office, Ltd. (insurer). Four days after the issuance of the policy, the insured premises were burned. On August 20, 1983, Tan filed his claim. The insurer, via letter denied the same; the insured received a copy there of on April 2, 1984. On April 3, 1984, Tan wrote the insurer, seeking reconsideration of the said denial; this was still denied. On November 20, 1985, Tan filed civil case to enforce the claim. The insurer moved for the dismissal of the case on ground of prescription.
Issue
Should Sun Insurance Office Ltd. be held liable?
Ruling and Discussion
No. Sun Insurance Office Ltd. should not be held liable.
The Supreme Court absolved the insurer from liability on the ground of prescription. It held that the insured’s cause of action commenced from the time he knew of the denial of his claim. In this case, it was on April 2, 1984, when he received the rejection letter from the insurer. Yet he filed the civil case only about 20 months thereafter, on November 20, 1985. Furthermore, the filing of a motion for reconsideration with the insurer did not forestall the running of the 12-month prescriptive period for bringing an action. The rejection from which the running of the prescriptive period shall be reckoned should be construed as the rejection, in the first instance. Otherwise, it should have been expressly stipulated. The purpose of such a requirement is to ensure that suits be brought by the insured while the evidence as to the origin and cause of destruction has not yet disappeared.
Dispositive
Decision reversed and set aside. Case dismissed.