Topic: Partnership Name, Article 1815

Sharruf & Co. v Baloise Fire Insurance Co.

Gr No. 44119, 30 March 1937
Villa-real, J.

Plaintiffs-Appellees: Sharruf & Co., known also as Sharruf & Eskenazi, Salomon Sharruf and
Elias Eskenazi

Defendants-Appellants: Baloise Fire Insurance Co., Sun Insurance Office Ltd., and
Springfield Insurance Co., represented by Kuenzle & Streiff, Inc.

Facts:
In June and July 1933, plaintiffs Salomon Sharruf and Elias Eskenazi were doing
business under the firm name of Sharuff & Co. They applied for insurance of their
merchandise at the defendant companies.

On July 25 and August 15 1933, defendant companies issued insurance policies, the total
amount of P40,000, in the name of Sharruf & Co. Salomon and Elias paid the premiums
of the policies.

On August 26, 1933, plaintiffs executed a contract of partnership between themselves

wherein they substituted the name of their firm with Sharruf & Eskenazi.

On September 22, 1933, a fire broke out at the premises of the plaintiff companys
storage building that caused the loss of their merchandise.

Plaintiffs filed insurance claims against 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.

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?
Rulings:

1. Yes.

In Lim Cuay Sy v Northern Assurance Co., the Supreme Court held that A policy
insuring merchandise against fire is not invalidated by the fact that the name of the
Insured in the policy is incorrectly written when the error was not due to any fraudulent
intent on the part of the Insured.

In the present case, while it is true that the defendant companies issued the policies to the
firm name Sharruf & Co, changing the firm name to Sharruf & Eskenazi 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 the 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 firm and the latter is
afterwards change to Sharruf & Eskenazi, which are the names of the partners 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 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.

Doctrine:

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