South Sea Surety and Insurance Co., Inc. vs. Court of Appeals; G.R. No. 102253. June 2, 1995
Effect – Payment Through an Agent
FACTS
An insurer which delivers to an insurance agent or insurance broker an insurance policy shall be deemed to have authorized such agent to receive on its behalf payment of any premium which is due on such policy.
On 16 January 1984, Valenzuela Hardwood entered into an agreement with Seven Brothers Shipping to load on board in its vessel M/V Seven Ambassador, lauan round logs numbering 940 for shipment in Manila. On January 20, Hardwood insured the logs against loss and/or damage with defendant South Sea Surety for 2 Million. On January 24, Hardwood paid the premium for the insurance policy to Victorio Chua. On January 25, M/V Seven Ambassador sank resulting in the loss of the plaintiff’s insured logs. However, it was only in the morning of 30 January 1984 or 5 days after the vessel sank when his messenger tendered the check to defendant South Sea Surety and Insurance Co., Inc.
South Sea Surety cancelled the insurance policy it issued as of the date of inception for non-payment of the premium due in accordance with Section 77 of the Insurance Code.
Hardwood demanded for the payment of the proceeds of the policy but the South Sea denied liability under the policy. Seven Brothers Shipping also denied liability.
The trial court rendered judgment in favor of plaintiff Hardwood. The Court of Appeals affirmed the judgment of the court a quo only against the insurance corporation; in absolving the shipping entity from liability.
ISSUE
Whether or not Victorio Chua, in receiving the check for the insurance premium prior to the occurrence of the risk insured against has so acted as an agent of petitioner.
HELD
YES. When the appellant South Sea Surety and Insurance Co., Inc. delivered to Mr. Chua the marine cargo insurance policy for the plaintiff’s logs, he is deemed to have been authorized by the South Sea Surety and Insurance Co., Inc. to receive the premium which is due on its behalf.
An insurer which delivers to an insurance agent or insurance broker an insurance policy shall be deemed to have authorized such agent to receive on its behalf payment of any premium which is due on such policy
NOTES
Undoubtedly, the payment of the premium is a condition precedent to, and essential for, the efficaciousness of the contract. The only two statutorily provided exceptions are (a) in case the insurance coverage relates to life or industrial life (health) insurance when a grace period applies and (b) when the insurer makes a written acknowledgment of the receipt of premium, this acknowledgment being declared by law to be then conclusive evidence of the premium payment (Secs. 77-78, Insurance Code).
Please check out our tags for more personal case digests!
abuse of rights (2) Administrative Law (5) Agency (4) alteration (2) American Express Transnational (1) Article 19 (2) Article 26 of the Family Code (2) article 36 (4) Article 148 of the Family Code (2) Article 153 of the Family Code (3) Bill of Rights (3) Borre (1) capacity to contract marriage (2) Case Digest (297) Chain of Custody (2) Civil Code (20) civil law (41) Civil Procedure (48) commercial law (77) Company Policies (2) Conflicts of Law (33) Constitutional Law (25) Constitutional Rights of Employers and Employees (2) court of appeals (9) Credit Card (2) Credit Transactions (7) criminal procedure (9) Different Kind Of Obligations (2) dismissal (2) divorce (2) Donor's Tax (1) Dreamwork (2) Drilon (1) ec2 (2) Effect of Partial payment (2) ejusdem generis (2) Election Law (2) Eminent Domain (4) Employee’s Rights (2) evidence (2) Extinguishment of Obligations – Compensation (2) family code (17) family home (4) Feed the Children Philippines Inc. (1) foreign divorce (2) forgery (2) G.R. No. 144134 (1) G.R. No. 149110 (1) G.R. No. 184397 (1) G.R. No. 215568 (1) G.R. No. 228320 (1) Genesis Transport Service Inc. (1) instagram (2) Insurable Interest (2) Insurance (51) Intellectual Property (6) japan (4) Judicial review (2) labor law (37) Law School (287) Local Government Code (2) Mariveles Shipyard Corp. Court of Appeals (1) marriage (12) NAIA Terminal 3 (2) National Labor Relations Commission (7) negotiable instrument (10) No. L-81958 (1) Oblicon (19) Obligation and Contracts (25) Paredes (1) Payment through Agent (2) Persons and Family Relations (21) Philippine Airlines (2) Philippine Airlines Inc. (2) Philippine citizenship (2) Police power (2) Political Law (33) Ponente (7) Premium Payment (2) programming (2) property (6) Psychological Incapacity (4) public officers (2) Reinsurance (3) Remedial Law (52) Residence (2) Rights to Security of Tenure and Due Process (2) Rivera (1) Secretary of Labor (1) security (2) Seven (7) Cardinal Rights of Workers (2) shrines (2) Social justice (7) Sources of Labor Rights and Obligations (4) Succession (3) Taxation Law (6) temple (2) tokyo (3) TYPES of Employees (2) West Coast Life (1)
