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Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE:
In cases where the insured’s car is wrongfully taken without consent from a service or repair shop—such as for a joyride during which it is destroyed in an accident—the insurer is still liable to pay for the total loss of the vehicle under the theft clause of the policy.
In the case of Villacorta v. Insurance Commission (G.R. No. 54171, October 28, 1980) the Supreme Court held that where the insured’s car is wrongfully taken without the insured’s consent from the car service and repair shop to whom it had been entrusted for check-up and repairs (assuming that such taking was for a joy ride, in the course of which it was totally smashed in an accident), the insurer is liable and must pay insured for the total loss of the insured vehicle under the theft clause of the policy.
The subsequent recovery of the vehicle does not negate its loss through theft.
Common sense dictates that the mere recovery of a stolen vehicle does not and will not erase the fact of theft. Several cases decided by the Court also laid down the rule that the subsequent recovery of a stolen motor vehicle does not negate theft, which is perfected from the moment of unlawful taking. (Wijangco v. UCPB General Insurance Co., Inc. (G.R. No. 257086, April 23, 2025).
In Villacorta, which was reiterated in Association of Baptists for World Evangelism, Inc. v. Fieldmen’s Insurance Co, Inc., Justice Teehankee, interpreting the theft clause of an insurance policy, explained that when one takes the motor vehicle of another without the latter’s consent even if the motor vehicle is later returned, there is theft, there bein intent to gain as the use of the thing unlawfully taken constitutes gain:
“Assuming, despite the totally inadequate evidence, that the taking was “temporary” and for a “joy ride”, the Court sustains as the better view that which holds that when a person, either with the object of going to a certain place, or learning how to drive, or enjoying a free ride, takes possession of a vehicle belonging to another, without the consent of its owner, he is guilty of theft because by taking possession of the personal property belonging to another and using it, his intent to gain is evident since he derives therefrom utility, satisfaction, enjoyment and pleasure.”
Thus, in Wijangco, the High Court reiterated that Section 249 of the Insurance Code sets a definite time within which payment of the insurance claim must be made. When this period has elapsed and before the insured vehicle is recovered, payment for the loss of the vehicle is fixed and the insured cannot be compelled to receive the vehicle despite its recovery.
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.
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Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding legal services, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/ 09175772207/ 09778050020.
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