Development Bank of the Philippines v. Traverse Development Corporation

Summary

This commercial law case involves a fire insurance dispute where Traverse Development Corporation's building was destroyed by fire while covered under Central Surety's Policy No. TAR 1056, which had been transferred from FGU Insurance through DBP's facilitation as part of a mortgage loan requirement. When Central refused to pay the full P1 million claim, offering only P230,748, Traverse sued both the insurer and DBP. The Supreme Court ultimately held that while Central must pay the insurance claim, DBP should not be solidarily liable for attorney's fees because its facilitation of the insurance transfer did not constitute bad faith and did not compel Traverse to litigate. The Court emphasized that attorney's fees are exceptional remedies requiring specific legal justification under Article 2208 of the Civil Code, and that Central's refusal to pay, not DBP's actions, was the proximate cause of the litigation.