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    Malayan Integrated Industries Corp V CA Digest

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    Dawn Jessa Go
    The Supreme Court ruled that the payment of the insurance premium six months after the policy was issued rendered the policy effective from the date of issue. While the insurance code states that a policy is not valid until premium payment, this did not apply because payment was eventually made. The receipt showed payment was received later with the understanding it could be paid after. The Court found the insurance company could not argue both that payment was prohibited but also that no insurance existed due to non-payment. The payment made the policy operative from the initial date of issue.

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    Malayan Integrated Industries Corp V CA Digest

    Uploaded by

    Dawn Jessa Go
    235 views1 page
    The Supreme Court ruled that the payment of the insurance premium six months after the policy was issued rendered the policy effective from the date of issue. While the insurance code states that a policy is not valid until premium payment, this did not apply because payment was eventually made. The receipt showed payment was received later with the understanding it could be paid after. The Court found the insurance company could not argue both that payment was prohibited but also that no insurance existed due to non-payment. The payment made the policy operative from the initial date of issue.

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    39. Malayan Integrated Industries Corp v CA Digest

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    The Supreme Court ruled that the payment of the insurance premium six months after the policy was issued rendered the policy effective from the date of issue. While the insurance code states that a policy is not valid until premium payment, this did not apply because payment was eventually made. The receipt showed payment was received later with the understanding it could be paid after. The Court found the insurance company could not argue both that payment was prohibited but also that no insurance existed due to non-payment. The payment made the policy operative from the initial date of issue.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    235 views1 page

    Malayan Integrated Industries Corp V CA Digest

    Uploaded by

    Dawn Jessa Go
    The Supreme Court ruled that the payment of the insurance premium six months after the policy was issued rendered the policy effective from the date of issue. While the insurance code states that a policy is not valid until premium payment, this did not apply because payment was eventually made. The receipt showed payment was received later with the understanding it could be paid after. The Court found the insurance company could not argue both that payment was prohibited but also that no insurance existed due to non-payment. The payment made the policy operative from the initial date of issue.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    of 1

    Malayan Insurance v Arnaldo, et al., G.R. No.

     L­67835, October 12, 1987

    Issue: Did the payment of premium made six months after the policy was issued render such policy effective as
    to allow the insured to recover from it?

    Ruling: The payment made by the insured to the agent of the insurance company rendered the policy effective 
    as of the time the policy was issued.

    Basis: The petitioner relies heavily on Section 77 of the Insurance Code providing that:

    SEC. 77. An insurer is entitled to payment of the premium as soon as the thing is exposed to the
    peril insured against. Notwithstanding any agreement to the contrary, no policy or contract of
    insurance issued by an insurance company is valid and binding unless and until the premium
    thereof has been paid, except in the case of a life or an industrial life policy whenever the grace
    period provision applies.

    The above provision is not applicable because payment of the premium was in fact eventually made in this
    case. Notably, the premium invoice issued to Pinca at the time of the delivery of the policy on June 7, 1981 was
    stamped "Payment Received" of the amoung of P930.60 on "12­24­81" by Domingo Adora. This is important
    because it suggests an understanding between MICO and the insured that such payment could be made later, as
    agent Adora had assured Pinca. In any event, it is not denied that this payment was actually made by Pinca to
    Adora, who remitted the same to MICO.

    There is the petitioner's argument, however, that Adora was not authorized to accept the premium payment
    because six months had elapsed since the issuance by the policy itself. It is argued that this prohibition was
    binding upon Pinca, who made the payment to Adora at her own risk as she was bound to first check his
    authority to receive it. 

    MICO   is   taking   an   inconsistent   stand.   While   contending   that   acceptance   of   the   premium   payment   was
    prohibited by the policy, it at the same time insists that the policy never came into force because the premium
    had not been paid. One surely, cannot have his cake and eat it too.

    We do not share MICO's view that there was no existing insurance at the time of the loss sustained by Pinca because her 
    policy never became effective for non­payment of premium. Payment was in fact made, rendering the policy operative as 
    of June 22, 1981, and removing it from the provisions of Article 77, Thereafter, the policy could be cancelled on any of 
    the supervening grounds enumerated in Article 64 (except "nonpayment of premium") provided the cancellation was 
    made in accordance therewith and with Article 65.

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