Saura vs.

Philippine
G.R. No. L-15184 May 31, 1963
Lessons Applicable: Mortgagor (Insurance)
Laws Applicable:
FACTS:

Saura Import & Export Co Inc., mortgaged to the Phil. National

Bank, a parcel of land.

The mortgage was amended to guarantee an increased amount,

bringing the total mortgaged debt to P37,000

On the land mortgage is a building owned by Saura Import &

Export Co Inc. which was insured with Philippine International
Surety (Insurer) even before the mortgage contract so it was
required to endorse to mortgagee PNB

October 15, 1954: Barely 13 days after the issuance of the fire
insurance policy, the insurer cancelled it. Notice of the cancellation
was given to PNB (mortgagee). But Saura (insured) was not
informed.

April 6, 1955: The building and all its contents worth P40,685.69
were burned so Saura filed a claim with the Insurer and mortgagee
Bank

RTC: dismissed

ISSUE: W/N Philippine International Surety should be held liable for the
claim because notice to only the mortgagee is not substantial
HELD:YES. Appealed from is hereby reversed. Philippine International
Surety Co., Inc., to pay Saura Import & Export Co., Inc., P29,000

It was the primary duty of Philippine International Surety to notify

the insured, but it did not

If a mortgage or lien exists against the property insured, and the

policy contains a clause stating that loss, if any, shall be payable to
such mortgagee or the holder of such lien as interest may appear,
notice of cancellation to the mortgagee or lienholder alone is
ineffective as a cancellation of the policy to the owner of the
property.

liability attached principally the insurance company, for its failure to

give notice of the cancellation of the policy to Saura