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G.R. No.

L-2294 May 25, 1951 that should be returned by the petitioner for the
unexpired term of the policy in question,
FILIPINAS COMPAIA DE SEGUROS, petitioner, beginning December 11, 1941. Without costs.
vs. So ordered.
CHRISTERN, HUENEFELD and CO., INC., respondent

Fact: G.R. No. L-1669 August 31, 1950

1. On october 1, 1941, Respondent corporation
obtained a Fire insurance in the amount of PAZ LOPEZ DE CONSTANTINO, plaintiff-appellant,
100K covering merchandise contained in a vs.
building located in binondo, Manila. ASIA LIFE INSURANCE COMPANY, defendant-
2. On February 1942, the building and insured appellee.
merchandise was burned.
3. In due time the respondent submitted to the Fact:
petitioner its claim under the policy.
4. The petitioner refused to pay the claim on the
ground that the policy issued in favor of the
1. On September 27, 1941, Asia Life Insurance
Company issued Policy no. 93912 for P3, 000
respondent had ceased to be inforce on the
for the life of Arcadio Constantino for a term of
date the US declared war against the germany.
twenty years.
5. Respondent corporation being controlled by the
german subjects and petitioner being a 2. The 1st premium covers the period up to
company under american jurisdiction. September 26, 1942.
6. Petitioner, in pursuance of the order of the 3. Plaintiff was regularly appointed as beneficiary.
Director of Bureau of Financing, paid the 4. After the 1st payment, no further premiums were
respondents. paid.
7. On August 6, 1946, the petitioner filed a 5. The insured died on September 22, 1944.
recovery case in CFI of Manila for the sum paid 6. Beneficiary demanded for payment but was
to the respondents which CFI dismissed the refused on the ground of non-payment of the
case. premiums.
8. CA affirmed the CFI decision hence this case. 7. Plaintiff maintain that the non-payment of the
Issue: premiums was caused by the closing of
Whether the policy in question become null and defendants offices in manila during the
void upon the declaration of war between the US and Japanese occupation and the impossible
Germany. circumstances created by war.
8. Defendant on the other hand asserts that the
Held: policy had lapsed for non-payment of
1. Yes. The Philippine Insurance Law in section 8 premiums, in accordance with the contract of
provides that "anyone except a public enemy the parties and the law applicable to the
may be insured." It stands to reason that an situation.
insurance policy ceases to be allowable as 9. The lower court absolved the defendant. Hence
soon as an insured becomes a public enemy. this appeal.
2. The respondent having become an enemy
corporation on December 10, 1941, the Issue:
insurance policy issued in its favor on October
1, 1941, by the petitioner had ceased to be valid
Whether the respondent erred in absolving defendant
and enforceable, and since the insured goods
from all liability on the policy in question?
were burned after December 10, 1941, and
during the war, the respondent was not entitled
to any indemnity under said policy from the Ruling:
3. However, elementary rules of justice (in the 1. No. Because the policy in question expressly
absence of specific provision in the Insurance stipulates that all premium payments are due in
Law) require that the premium paid by the advance and any unpunctuality in making any
respondent for the period covered by its policy such payment shall cause this policy to laps."
from December 11, 1941, should be returned by Wherefore, it would seem that pursuant to the
the petitioner. express terms of the policy, non-payment of
4. Wherefore, the appealed decision is hereby premium produces its avoidance.
reversed and the respondent corporation is 2. In Glaraga vs. Sun Life Ass. Co., The court held
ordered to pay to the petitioner the sum of that a life policy was avoided because the
P77,208.33, Philippine currency, less the premium had not been paid within the time
amount of the premium, in Philippine currency, fixed, since by its express terms, non-payment
of any premium when due or within the thirty-
day period of grace, ipso facto caused the Issue:
policy to lapse
3. The United States rule declares that the Whether the Plaintiff was entitled to the amount
contract is not merely suspended, but is of the policy.
abrogated by reason of non-payments is
peculiarly of the essence of the contract. It Ruling:
additionally holds that it would be unjust to allow
the insurer to retain the reserve value of the 1. Since this action was decided by the court
policy, which is the excess of the premiums below, several cases analogous to this one in
paid over the actual risk carried during the its main characteristics have come up before
years when the policy had been in force. this Court. (Paz Lopez de Constantino vs. Asia
4. The case, therefore, is one in which time is Life Insurance Company,1 G.R. No. L-1669;
material and of the essence and of the essence Agustina Peralta vs. Asia Life Insurance
of the contract. Non-payment at the day Company,2 G.R. No. L-1670; James McGuire
involves absolute forfeiture if such be the terms vs. The Manufacturers Life Insurance Co;3 G.
of the contract, as is the case here. Courts R. No. L-3581; National Leather Co; Inc. vs.
cannot with safety vary the stipulation of the The United States Life Insurance Co.,4 G.R. No.
parties by introducing equities for the relief of L-2668; Victoria Hidalgo Vda. de Carrero, et al.,
the insured against their own negligence. vs. The Manufacturers Life Insurance Co.,5 G.
5. For all the foregoing, the lower court's decision R. No. L-3032; and West Coast Life Insurance
absolving the defendant from all liability on the Co. vs. Patricio H. Gubagaras,6 G. R. No. L-
policies in question, is hereby affirmed, without 2810) In Paz Lopez de Constantinos. Asia Life
costs. Insurance Company, G. R. No. L-1669, the
leading case, the Court speaking through Mr.
Justice Bengzon, adopted this doctrine:

G.R. No. L-4197 March 20, 1952 The case, therefore, is one in which time is
material and of the essence of the contract.
Non-payment at the day involves absolute
FIDELA SALES DE GONZAGA, plaintiff-appellant, forfeiture is such be the terms of the contract,
vs. as is the case here. Courts cannot with safety
THE CROWN LIFE INSURANCE vary the stipulation of the parties by introducing
COMPANY, defendant-appellee. equities for the relief of the insured against their
own negligence.
The aforecited decisions are decisive of the
1. On September 26, 1939 the Crown Life proposition that non-payment of premiums by
Insurance Co., whose home office is in Toronto, reason of war puts an end to the contract.
Canada, issued to Ramon Gonzaga through its
branch office in Manila a 20-year endowment 2. Gonzaga could have taken advantage if he was
policy for P15, 000 really intent on preserving his policy.
2. The insured paid in due time the agreed yearly Uncontroverted or admitted is the fact that the
premium, which was P591.00, for three defendant's agent, through whom he had been
consecutive years, the last payment having insured, lived in Malabon, Rizal, and was his
been effected on September 6, 1941. close acquaintance; and so were some of the
3. On account of the outbreak of war, no defendant's Filipino employees who handled
premiums were paid after that date, although the insurance business of Hanson, Orth and
the policy was continued in force up to June 12, Stevenson during the occupation. And Gonzaga
1943, under its automatic premium loan clause. admittedly come to Manila on a visit every now
4. Ramon Gonzaga died on June 27, 1945 from and then, and could have, without difficulty,
an accident. contacted any of those people.
5. The beneficiary was unable to collect the 3.
amount of the said policy, which began this suit 4. In addition, the policy carried a clause providing
on December 1947. for its reinstatement under certain conditions
6. The defendant set up the defense that the within three years from the date of lapse on
policy had lapsed by non-payment of the application of the insured. The present policy
stipulated premiums of the stipulated dates. lapsed on June 12, 1943, the Company's
And the trial court in a carefully written decision Manila branch was reopened on May 1, 1945
ruled against the plaintiff. and resumed regular business through the
7. Hence this appeal. same general agents at the Wilson Building on
Juan Luna Street, Manila and Ramon Gonzaga 11. Property was destroyed by fire. SMB filed an
died on June 27, 1945. It is undoubted that action in court to recover on the policies.
Gonzaga knew all that. It is not denied that he Harding was made a defendant because by
was an employee in the United States Navy, virtue of the sale, he became the owner of the
that the united States Navy had an office in the property, although the policies were issued in
same Wilson Building, and that he came at SMBs name.
least twice a month to that office for his salary. 12. SMB sought to recover the proceeds to the
5. Both in law and in reason, the action was extent of its mortgage credit with the balance to
properly dismissed and the appealed decision is go to Harding.
hereby affirmed, with costs 13. Insurance Companies contended that they were
not liable to Harding because their liability under
G.R. No. L-7667 November 28, 1955 the policies was limited to the insurable
interests of SMB only.
CHERIE PALILEO, plaintiff-appellee, 14. SMB eventually reached a settlement with the
vs. insurance companies and was paid the balance
BEATRIZ COSIO, defendant-appellant. of its mortgage credit.
15. Harding was left to fend for himself. Trial court
Fact: ruled against Harding.
16. Hence the appeal.
G.R. No. L-14300 January 19, 1920
SAN MIGUEL BREWERY, ETC., plaintiff-appellee, Whether or not the insurance companies are
vs. liable to Harding for the balance of the proceeds of the
AL., defendants-appellees.
HENRY HARDING, defendant-appellant. Ruling:

Fact: 1. No. Under the Insurance Act, the measure of

insurable interest in the property is the extent to
1. On Jan. 12, 1918, Dunn mortgaged a parcel of which the insured might be damnified by the
land to SMB to secure a debt of 10k. loss or injury thereof. S16
2. Mortgage contract stated that Dunn was to have 2. Also it is provided that the insurance shall be
the property insured at his own expense, applied exclusively to the proper interest of the
authorizing SMB to choose the insurers and to person in whose name it is made. S50
receive the proceeds thereof and retain so 3. Undoubtedly, SMB as the mortgagee of the
much of the proceeds as would cover the property, had an insurable interest therein; but it
mortgage debt. could NOT, in any event, recover upon the two
3. Dunn likewise authorized SMB to take out the policies an amount in excess of its mortgage
insurance policy for him. credit.
4. Brias, SMBs general manager, approached 4. Under S19 and S55 of the Insurance Act,
Law Union for insurance to the extent of 15k neither Dunn nor Harding could have recovered
upon the property. from the two policies.
5. In the application, Brias stated that SMBs A change of interest in any part of a thing
interest in the property was merely that of a insured unaccompanied by a corresponding
mortgagee. change of interest in the insurance, suspends
6. Law Union, not wanting to issue a policy for the the insurance to an equivalent extent, until the
entire amount, issued one for P7,500 and interest in the thing and the interest in the
procured another policy of equal amount from insurance are vested in the same person S19
Filipinas Cia de Seguros. The mere transfer of a thing insured does not
7. Both policies were issued in the name of SMB transfer the policy, but suspends it until the
only and contained no reference to any other same person becomes the owner of both the
interests in the propty. policy and the thing insured S55
8. Both policies required assignments to be 5. With respect to Harding, when he acquired the
approved and noted on the policy. property, no change or assignment of the
9. Premiums were paid by SMB and charged to policies had been undertaken.
Dunn. A year later, the policies were renewed. 6. The policies might have been worded differently
10. In 1917, Dunn sold the property to Harding, but so as to protect the owner, but this was not
no assignment of the policies was made to the done.
latter. 7. The judgment is therefore affirmed, with costs
against the appellant. So ordered.
1. No. Actual notice of cancellation in a clear
and unequivocal manner, preferably in
G.R. No. L-15184 May 31, 1963 writing should be given by the insurer to
the insured so that the latter might be given
SAURA IMPORT & EXPORT CO., INC., plaintiff- an opportunity to obtain other insurance for
appellant, his own protection. The notice should be
vs. personal to the insurer and not to and/or
PHILIPPINE INTERNATIONAL SURETY CO., INC., through any unauthorized person by the
and PHILIPPINE NATIONAL BANK, defendants- policy. Both the PSIC and the PNB failed,
appellees. wittingly or unwittingly to notify Saura of the
cancellation made.
2. If a mortgage or lien exists against the property
insured, and the policy contains a clause stating
1. On Dec. 26, 1952, Saura mortgaged to PNB its that loss, if any, shall be payable to such
registered parcel of land in Davao to secure the mortgagee or the holder of such lien as interest
payment of a promissory note of P27T. may appear, notice of cancellation to the
2. A building of strong materials which was also mortgagee or lienholder alone is ineffective as a
owned by Saura, was erected on the parcel of cancellation of the policy to the owner of the
land and the building had always been covered property. (Connecticut Ins. Co. v. Caumisar,
by insurance even before the execution of the 218 Ky. 378, 391 SW 776, cited in 29 Am. Jur.
mortgage contract. p. 743).
3. Pursuant to the mortgage agreement which 3. The insurer contends that it gave notice to
required Saura to insure the building and its PNB, as mortgagee of the property and that
contents, it obtained a fire insurance for P29T was already substantial compliance with its
from PISC for a period of 1 year starting Oct. 2, duty to notify the insured of the cancellation
1954. of the policy. But notice to the bank, as far
4. The mortgage also required Saura to endorse as Saura herein is concerned, is not
the insurance policy to PNB. The memo effective notice.
stated: Loss if any, payable to PNB as their 4. WHEREFORE, the decision appealed from is
interest may appear, subject to the terms, hereby reversed, and another is entered,
conditions and warranties of this policy. condemning the defendant-appellee Philippine
5. The policy was delivered to PNB by Saura. International Surety Co., Inc., to pay Saura
6. On Oct. 15, 1954, barely 13 days after the Import & Export Co., Inc., appellant herein, the
issuance of the fire insurance, PISC canceled sum of P29,000.00, the amount involved in
the same, effective as of the date of Policy No. 429, subject-matter of the instant
issue. Notice of the cancellation was sent to case. Without costs.
PNB in writing and was received by the bank on
Nov. 8, 1954.
7. On Apr. 6, 1955, the building and its contents VIOLETA R. LALICAN,
worth P4,685 were burned. On April 11, 1985, Petitioner,
Saura filed a claim with PISC and mortgagee - versus -
8. Upon presentation of notice of loss with PNB, LIMITED, AS REPRESENTED BY THE PRESIDENT
Saura learned for the first time that the policy VICENTE R. AVILON,
had been previously canceled by PISC, when Respondent.
Sauras folder in the banks file was opened and
the notice of the cancellation by PISC was Facts:
found. 1. During his lifetime, Eulogio applied for an
9. PISC refused to pay the amount of the insurance policy with Insular Life.
insurance. In view of the said refusal, Petitioner 2. On 24 April 1997, Insular Life, through Josephine
filed a complaint against insurer. Malaluan (Malaluan), its agent in GapanCity,
10. CFI dismissed the complaint. Hence this issued in favor of Eulogio Policy No. 9011992
petition. 3. Violeta was named as the primary beneficiary.
4. Under the terms of Policy No. 9011992, Eulogio
Issue: was to pay the premiums on a quarterly basis in
the amount of P8, 062.00.
Whether there was a proper cancellation of the said 5. According to the Policy Contract, there was a
policy grace period of 31 days for the payment of each
premium. If any premium was not paid on or
Ruling: before the due date, the policy would be in
default, and if the premium remained unpaid until
the end of the grace period, the policy would
automatically lapse and become void. responded to the said demand letter by agreeing
6. Eulogio failed to pay the premium due on 24 to conduct a re-evaluation of Violetas claim.
January 1998, even after the lapse of the grace 18. Without waiting for the result of the re-evaluation
period of 31 days. Policy No. 9011992, therefore, by Insular Life, Violeta filed with the RTC, on 11
lapsed and became void. October 1999, a Complaint for Death Claim
7. Eulogio submitted to the Cabanatuan District Benefit,
Office of Insular Life, through Malaluan, on 26 19. The RTC dismissed the case. Hence this petition
May 1998, an Application for Reinstatement of
Policy No. 9011992. Issue:
8. Insular Life notified Eulogio that his Application
for Reinstatement could not be fully processed Whether Eulogio was able to reinstate the lapsed
because he left unpaid the overdue interest. insurance policy on his life before his death on 17
9. Insular Life instructed Eulogio to pay the amount September 1998.
of interest and to file another application for
reinstatement. Eulogio was likewise advised by Ruling:
Malaluan to pay the premiums that subsequently 1. No. The Court rules in the negative.
became due, plus interest. 2. That Policy No. 9011992 had already lapsed is a
10. On 17 September 1998, Eulogio went to fact beyond dispute. Eulogios filing of his first
Malaluans house and submitted a second Application for Reinstatement with Insular Life,
Application for Reinstatement of Policy through Malaluan, on 26 May 1998, constitutes
No. 9011992, including the amount an admission that Policy No. 9011992 had lapsed
of P17,500.00, representing payments for the by then.
overdue interest and the premiums which 3. To reinstate a policy means to restore the same
became due. As Malaluan was away on a to premium-paying status after it has been
business errand, her husband received Eulogios permitted to lapse.
second Application for Reinstatement and issued 4. Both the Policy Contract and the Application for
a receipt for the amount Eulogio deposited. Reinstatement provide for specific conditions for
11. A while later, on the same day, 17 September the reinstatement of a lapsed policy.
1998, Eulogio died of cardio-respiratory arrest 5. In the instant case, Eulogios death rendered
secondary to electrocution. impossible full compliance with the
12. Without knowing of Eulogios death, Malaluan conditions for reinstatement of Policy
forwarded to the Insular Life Regional Office in No. 9011992. True, Eulogio, before his death,
the City of San Fernando, on 18 September managed to file his Application for
1998, Eulogios second Application for Reinstatement and deposit the amount for
Reinstatement of Policy No. 9011992 payment of his overdue premiums and
and P17,500.00 deposit. However, Insular Life no interests thereon with Malaluan; but Policy
longer acted upon Eulogios second Application No. 9011992 could only be considered
for Reinstatement, as the former was informed reinstated after the Application for
on 21 September 1998 that Eulogio had already Reinstatement had been processed and
passed away. approved by Insular Life during Eulogios
13. Violeta filed with Insular Life a claim for payment lifetime and good health.
of the full proceeds of Policy No. 9011992. 6. Policy No. 9011992 remained lapsed and void,
14. Insular Life informed Violeta that her claim could not having been reinstated in accordance with
not be granted since, at the time of Eulogios the Policy Contract and Application for
death, Policy No. 9011992 had already lapsed, Reinstatement before Eulogios death. Violeta,
and Eulogio failed to reinstate the same. therefore, cannot claim any death benefits
15. According to the Application for Reinstatement, from Insular Life on the basis of Policy
the policy would only be considered reinstated No. 9011992; but she is entitled to receive the full
upon approval of the application by Insular Life refund of the payments made by Eulogio thereon.
during the applicants lifetime and good health, 7. WHEREFORE, premises considered, the
and whatever amount the applicant paid in Court DENIES the instant Petition for Review
connection thereto was considered to be a on Certiorari under Rule 45 of the Rules of
deposit only until approval of said application. Court. The Court AFFIRMS the Orders dated 10
16. DBP Check No. 0000309734, for the amount April 2008 and 3 July 2008 of the RTC of Gapan
of P25,417.00, drawn in Violetas favor, City, Branch 34, in Civil Case No. 2177, denying
representing the full refund of the payments made petitioner Violeta R. Lalicans Notice of Appeal, on
by Eulogio on Policy No. 9011992. the ground that the Decision dated 30 August
17. Violetas counsel subsequently sent a 2007 subject thereof, was already final and
letter dated 8 July 1999 to Insular Life, executory. No costs.
demanding payment of the full proceeds of Policy
No. 9011992. On 11 August 1999, Insular Life