FACTS
Equitable and Rural entered into a reciprocal facultative reinsurance agreement, wherein they agreed to cede to each other, by way of facultative reinsurance on policies of insurance or reinsurance issued by their respective fire insurance departments on risks situated in the Philippines, subject to the stipulations of the agreement.
The stock insured and covered by said Policy No. 5880 by Equitable was burned, and the share of the loss assumed by defendant as per reinsurance agreement was computed at P2,024.87. Another stock was burned which insurance policy was issued by Equitable. Despite repeated demands by plaintiff, defendant refused and failed to pay the sum of P2,024.87. On