9 February 2022

MR. SON GOKO

Blk. 7, Lot 5 & 7, Living Homes, Angeles
City of San Fernando, Pampanga

Dear Mr. Goko:

I write for and on behalf of my Client, VE GETA, [“Client”].

On 5 December 2021, my Client received your letter dated 2 November 2021

(“letter”), through its Supervisor, Ms. Sana All (“Ms. All”), relative to your concern
on the insurance premiums amounting to Five Hundred Nineteen Thousand Five
Hundred Fourteen Pesos (PHP519,514.00), inclusive of past due charges and
interest, as of 1 October 2021, for the Insurance Policy Numbers MC-PC-0003 and
MC-PC-0001 (“subject insurance policies”) that were issued in your name by Colob
Insurance Company (CIC), involving your motor vehicle which is more particularly
described below:

BRAND : MITSUBISHI
MAKE/MODEL : 2008 LANCER
ENGINE NO. : xxxxxx
CHASSIS NO. : xxxxxx
PLATE NO. : xxxxxx

In the letter, you expressly mentioned that you are amenable to pay the principal
amount of the corresponding premiums for the subject insurance policies, but
strongly opposed in paying the penalty and interest attached thereof.

At the onset, the subject insurance policies were applied for and on your behalf by
my Client, being your authorized representative/agent, with CIC pursuant to the
Automatic Renewal of Insurance on Mortgaged Motor Vehicle (“Automatic Renewal
Letter”) that you signed in connection with your then outstanding autofinancing
availment (“mortgage loan”) with my Client.

Accordingly, it is irrefutable that the mortgage loan was payable to my Client, while
the corresponding premiums for the subject insurance policies were ultimately
payable to CIC, the insurer.

Further, it is implicit in the Automatic Renewal Letter that you authorized my Client
to make good of or pay in advance the corresponding premiums when you agreed
that if the insurance premium is not paid within thirty (30) days from the expiration
of the first, which ended on 2 May 2011, and all subsequent insurance policies or
upon inception date of the respective insurance policy, the amount due shall be
added to the principal sum of which the related mortgage is given as security and
shall form part of the sum secured and be guaranteed by the mortgage.

Prudently, when you failed to pay the corresponding premiums for the subject
insurance policies within the thirty (30) day-term as provided under the Automatic
Renewal Letter, my Client, as your authorized representative/agent, paid for the
same to your advantage and for your continuous protection against inevitable
financial disbursements involving your abovementioned motor vehicle within the
insurance coverage period.

However, my Client was then considerate in not choosing the option of adding up
the corresponding premiums it paid in advance to the mortgage loan in order to
maintain the latter in current status.

After all, the Civil Code of the Philippines provides under Articles 1881 and 1882
that the agent may do such acts as may be conducive to the accomplishment of the
purpose of the agency, and the limits of the agent's authority shall not be
considered exceeded should it have been performed in a manner more
advantageous to the principal than that specified by him. Further, Article 1912
provides that “The principal must advance to the agent, should the latter so
request, the sums necessary for the execution of the agency. Should the agent
have advanced them, the principal must reimburse him therefor, even if the
business or undertaking was not successful, provided the agent is free from all
fault. The reimbursement shall include interest on the sums advanced, from the day
on which the advance was made.”

Then, since my Client acted as your authorized representative/agent in the subject

insurance policies, it received from CIC the corresponding policies for and on your
behalf.

Corollary thereto, my Client has never remiss in its duty to furnish you with the
corresponding policies for your file and copy. Too, for several times, my Client sent
you demand letters and statements of account (SOA) in connection with the
premiums advances. Unfortunately, as you indicated in your letter, the
corresponding policies, previous demand letters and SOAs were received either by
your security guard or maid. This, however, did not affect the validity of the subject
insurance policies that my Client had entered into with CIC, for and on your behalf
as your duly authorized representative/agent.

In addition, the “FULLY PAID” stamp indicated in the Automatic Renewal Letter
refers only to the present status of the mortgage loan. It has nothing to do with the
premiums advances as my Client never obliged you to pay more than the amount
of the mortgage loan that you know from the very beginning.
On your claim that the Automatic Renewal Letter runs counter with the provisions
of Section 50 of the Insurance Code, as amended, we beg to differ. The Automatic
Renewal Letter is not a rider, clause, warranty or endorsement to an existing
contract of insurance as contemplated under the said Section 50 of the Insurance
Code, but an authorization letter granting my Client the right to act for and on your
behalf in the subject insurance policies.

Section 77 of the Insurance Code is likewise not applicable as the corresponding

premiums for the subject insurance policies were duly paid by my Client, for and on
your behalf.

Premises considered, we regret to inform you that my Client cannot accede to your
request of paying only the principal amount of the corresponding premiums.

Should you have any questions or need additional information, you may contact my
Client’s HR Head, Ms. Call Moko, at her mobile no. 09108992377.

Very truly yours,

ATTY. KIKO MATSING

Legal Counsel