BY ATTY. JULIUS GREGORY B. DELGADO

WILFRIDO WIJANGCO VS. UCPB GENERAL INSURANCE CO., INC., G.R. NO. 257086 (APRIL 23, 2025): SUBSEQUENT RECOVERY OF CARNAPPED VEHICLE DOES NOT BAR INSURANCE CLAIM

Petitioner Wilfrido Wijangco (Wilfrido) is the registered owner of a 2003 Jaguar X-type with plate number XHP-988 (subject vehicle), per Certificate of Registration No. 4024310-3 dated December 21, 2005. The subject vehicle was insured with respondent UCPB General Insurance Co., Inc. (UCPB Insurance) in the amount of One Million Eight Hundred Thousand Pesos (PHP 1,800,000.00) for the period covering March 12, 2006 to March 12, 2007 under Policy PC-551278 (Insurance Policy).  The subject vehicle was carnapped while being riven by Wilfrido’s son, Andrew, while parking at Tropical Hot along President’s Avenue, Sucat, Paraňaque City on August 24, 2006.

On September 1, 2006, Wilfrido filed a claim with UCPB Insurance submitting the requirements for insurance claim. Despite repeated follow-ups, the insurer did not approve the claim. On March 11, 2007, Wilfrido’s counsel wrote UCPB Insurance to protest delay in the processing of his insurance claim and made formal demand against the insurer. On March 21, 2007, Wilfrido received a Letter from UCPB Insurance informing him that: (1) the subject vehicle was recovered and is under the custody of Traffic Management Group (TMG), Special Operations Division – Task Force Limbas; (2) UCPB Insurance will hold processing of Wilfrido’s insurance claim and subsequently close its file on its matter within 60 days from the date of the letter if no clearance from TMG is issued after the said period. 

Wilfrido filed a Complaint before the Regional Trial Court of Makati City on June 15, 2007. In a Decision dated April 12, 2016, the trial court gave credence to the testimony of Wilfrido’s witnesses and held that the subject vehicle was indeed stolen. The trial court held that Wilfrido, being the registered owner of the subject vehicle, had insurance interest over the insured vehicle and UCPB’s Insurance’s liability already attached when the insured vehicle was stolen. The trial court held that it is immaterial if the subject vehicle was subsequently recovered.

The Court of Appeals, however, reversed the ruling of the trial court. The appellate court held that Wilfrido supposedly failed to prove, by preponderance of evidence, the total loss of the subject vehicle because it was recovered and was in the possession of the TMG. The appellate court also held that Wilfrido supposedly failed to comply with his mandatory obligation to give immediate notice to the police ruling that the carnapping happened in 5:00 p.m. and it was reported only around 9:50 p.m. when Andrew reported the incident. Finally, the appellate court held that Wilfrido supposedly did not participate in the investigation conducted by the TMG, contrary to his obligation under the Conditions of the Insurance Policy.

The Supreme Court reversed and set aside the ruling of the Court of Appeals and reinstated the ruling of the Regional Trial Court of Makati City. The Court held that the UCPB Insurance failed to specify and notify Wilfrido the defect of his proof of loss within 90 days from its receipt pursuant to Section 249 of the Insurance Code. In the instant case, Andrew submitted the requirements for insurance claim on October 10, 2006. It was only on March 21, 2007, or after the lapse of 162 days from the time when Andrew submitted to the adjuster the proof of loss that UCPB Insurance wrote Wilfrido concerning the processing of his insurance claim and informing him that a TMG Clearance was required. 

The Supreme Court held, “Evidently, UCPB Insurance objected to the sufficiency of the preliminary proof of loss and required the issuance of a TMG Clearance and certificate of non-recovery after more than 90 days had already elapsed from the time when the proof of loss was submitted to it. The delay on the part of UCPB Insurance must be presumed to be unreasonable and unnecessary in the absence of proof to the contrary. Notably, apart from asserting that the insurance claim of Wilfrido was fraudulent, UCPB Insurance has not provided any justification for the delay in raising its objections to the proof of loss submitted by Andrew. The presumption of unnecessary delay must therefore stand and be taken against UCPB Insurance.”

The Supreme Court also held that subsequent recovery of the subject vehicle is immaterial to the present case. The Court held that common sense dictates that mere recovery of a stolen vehicle does not and will not erase the fact of theft. Several cases decided by the Supreme Court also laid down the rule that the subsequent recovery of a stolen motor vehicle does not negate theft, which is perfected form the moment of unlawful taking. The Court reiterates Section 249 of the Insurance Code which sets a definite time within which payment of the insurance claim must be made. When such period has elapsed and before the insured vehicle is recovered, payment for the loss of the vehicle is fixed ad the insured cannot be compelled to receive the vehicle despite its recovery. The Court further held that the period to indemnify the insured for a lost vehicle is set by law because motor vehicle insurance contracts would be of insignificant value if the insured, who has a theft policy in its favor, should be forced to indefinitely wait on the chance of having the stolen vehicle recovered, or be compelled to incur the expense of buying a new vehicle and thereafter take the old one if recovered. 

Citing the case of Villacorta vs. Insurance Commission, G.R. No. L-54171 (October 28, 1980), the Supreme Court held that the insured therein had a right to be indemnified for the loss of the insured vehicle because its unlawful taking proved to be quite permanent rather than temporary, given that the car was never returned that is serviceable and useful to the owner. The said case applies to the instant case since the subject vehicle was in an unserviceable state, with missing parts (i.e., car seats, emblem, stereo, speaker, door handle, and battery), flat tires, and damaged roofing and bumper. Given the situation, it cannot be said that its loss was merely temporary as it was returned in an unserviceable condition. 

The Supreme Court held, “To the mind of the Court, the requirement from UCPB Insurance for Wilfrido to appear before the TMG after the period for payment under Section 249 of the Insurance Code had already elapsed and only after it received information that the subject vehicle was at the TMG impounding area, was made only so it could force Wilfrido to take the subject vehicle and avoid its liability to indemnify the insured for the vehicle’s value. Importantly, the certificate of non-recovery that it belatedly required from Wilfrido is a document issued by the TMG (now the Highway Patrol Group) which states that the person bearing the document had a car that was carnapped and is yet to be retrieved as of the certificate’s issue date. Obviously, by the time that UCPB Insurance required Wilfrido’s appearance before the TMG within 60 days from March 21, 2007, the TMG would no longer issue a certificate of non-recovery to Wilfrido because by then, the vehicle has been retrieved and was even at its impounding area. Further, UCPB Insurance did not present any evidence to prove that it was substantially prejudiced by Wilfrido’s alleged breach of the cooperation clause. Accordingly, UCPB Insurance cannot deny liability for Wilfrido’ s insurance claim based on the cooperation clause of the Insurance Policy.”