Genobiagon, Nyl John Caesar A.

Insurance Law
Case Digest

Makati Tuscany Condominium Corp. VS CA

G.R. No. 95546, November 6, 1992

Facts:
AHAC issued an insurance policy in favor of Makati Tuscany Condominium.
However, the premium was paid in installments Subsequently, it was renewed and the
payment was still in installment. On its third renewal, Tuscany only paid two
installments and refused to pay the remaining balance of the premium. Consequently,
AHAC filed an action to recover the unpaid balance of the premium.

Issue:
Whether or not payment by installment of the premiums due on insurance policy
invalidates the contract of insurance.

Ruling:
The Supreme Court pronounced that the premiums paid in installments were valid. It
must be noted that in this case the insurer accepted all payments made by Tuscany,
though in installments. This manifests the intention of AHAC to honor the policies
issued to the petitioner. Hence, the payment made in installment does not affect the
validity of the insurance contract.
 UCPB General Insurance Co., Inc. VS Masagana Telamart, Inc.
G.R. No. 137172, April 4, 2001

Facts:
Masagana was issued several insurance policies from UCPB. On May 21, 1991 the
properties of Masagana were razed by fire. Subsequently, Masagana claimed for
indemnification from the insurer, UCPB. However, the insurer denied the claim for
indemnification of the insured. It argued that it cannot claim for indemnification because
the insurance policy was already expired and that it happened before the payment of the
premium.

Issue:
Whether or not the exceptions Sec. 77 of the Insurance Code may be applied to
Masagana’s advantage despite its practice of granting a 60-to90-day Credit term for the
payment of premiums.

Ruling:
The Supreme Court answered affirmative. It pronounced that there is nothing in Sec.
77 that prohibits both parties from stipulating credit terms within which the insured
would pay the premium. As an exception, the insurer may grant the credit extension of
the premium. Hence, if the insurer grants credit term to the insured for the payment of
the premium and the loss happened before the expiration of the term, the insured may
still recover from the insurer even if the premium will be paid after the loss, but within
the credit term.
 American Home Assurance Co. VS Chua
G.R. No. 130421, June 28, 1999

Facts:
AHAC issued a fire insurance policy in favor of Chua. Upon the expiration of the
insurance policy, Chua paid its premium to AHAC’s agent, Uy, for the renewal of the
policy. On April 6, 1990, the property insured by Chua was razed by fire. It then
demanded indemnification from the insurer, but the it denied its claim. The insurer
argued that the insured cannot claim from them because there was no insurance contract
that existed because Chua did not pay the premium.

Issue:
Whether or not there was a valid payment of the premium.

Ruling;
The Supreme Court ruled in the affirmative. As a general rule, an insurance policy is
not valid or binding if the premium is not yet paid. However, the insurance code also
provides for an exception, that is, for life and industrial life insurance. In the instant case
it was proven that Chua made its payment through its agent, Uy, and it also issued an
acknowledgment receipt of payment to the insured. Hence, it cannot deny that no
premium was made by the insured.
 Bonifacio Bros., Inc. VS Mora
G.R. No. L-20853, May 29, 1967

Facts:
Mora owned a car, which he mortgaged to H.S. Reyes with the condition that the
vehicle be insured in favor of the latter. It was subsequently insured. Later on, the car
met an accident and the insurance company immediately conducted an investigation and
assessment of the damage. Mora then authorized the Bonifacio Bros., Inc. to furnish the
labor and materials for the repairs of the car.
The insurer then paid Mora the indemnification. Apparently, the car was delivered to
Mora without the knowledge and consent of H.S. Reyes, and without paying to
Bonifacio Bros., Inc. Bonifacio Bros., Inc. filed for an action against Mora and the
insurance company for collection of the sum of money.

Issue:
Whether or not Bonifacio Bros., et al, have the right to claim from the insurance
company.

Ruling:
The Supreme Court ruled in the negative. It said that an insurance contract is distinct
and independent contract between the insured and the insurer. Third persons are not
vested with rights by law to the proceeds of an insurance, unless there exists a contract
allowing it.
 Go VS Redfern
G.R. No. 47705, April 25, 1941

Facts:
An insurance policy against accidents was issued by International Assurance in
favor of Redfern. Eventually, Redfern died due to an accident. His mother presented all
the necessary evidence to prove his death, and for the purpose of claiming the proceeds
from the insurance policy against the insurer. Her claim was denied by the insurance
company on the ground that the insurance policy was amended to include another
person.

Issue:
Whether or not the addition of another person in the insurance policy as
co-beneficiary be allowed for its share in the insurance proceeds.

Ruling;
The Supreme Court ruled in the negative. When designated in a policy, the
beneficiary acquires a right of which he cannot be deprived of without his consent,
unless the right has been reserved specifically to the insured to modify the policy.
Applying this, it is undisputed thereof that, Redfern did not reserve expressly his right to
change or modify the policy, Hence, the original beneficiary cannot receive the full
amount of the policy since there exists two beneficiaries now.