Maxilite and Marques entered into a trust receipt transaction with FEBTC, in the sum of US$80,765.00, for the shipment of various high-technology equipment from the United States, with the merchandise serving as collateral. Maxilite paid the premiums for these policies through debit arrangement. Far East Bank Insurance Brokers, Inc. (FEBIBI), subsidiary of FEBTC, upon the advice of FEBTC facilitated the procurement and processing from Makati Insurance Company of four separate and independent fire insurance policies over the trust receipted merchandise.
Finding that Maxilite failed to pay the insurance premium in the sum of P8,265.60 for one of the insurance policy, covering the period 24 June 1994 to 24 June 1995, FEBIBI sent written reminders to FEBTC, to debit Maxilite’s account. FEBTC failed to transmit the premium payments on subject insurance coverage.