FACTS:

June 7, 1981: Malayan insurance co., inc. (MICO) issued to Coronacion Pinca, Fire Insurance Policy for her
property effective July 22, 1981, until July 22, 1982

October 15,1981: MICO allegedly cancelled the policy for non-payment, of the premium and sent the
corresponding notice to Pinca
December 24, 1981: payment of the premium for Pinca was received by Domingo Adora, agent of MICO
January 15, 1982: Adora remitted this payment to MICO,together with other payments
January 18, 1982: Pinca's property was completely burned
February 5, 1982: Pinca's payment was returned by MICO to Adora on the ground that her policy had been
cancelled earlier but Adora refused to accept it and instead demanded for payment
Under Section 416 of the Insurance Code, the period for appeal is thirty days from notice of the decision of the
Insurance Commission. The petitioner filed its motion for reconsideration on April 25, 1981, or fifteen days such
notice, and the reglementary period began to run again after June 13, 1981, date of its receipt of notice of the
denial of the said motion for reconsideration. As the herein petition was filed on July 2, 1981, or nineteen days
later, there is no question that it is tardy by four days.
Insurance Commission: favored Pinca
MICO appealed
ISSUE: W/N MICO should be liable because its agent Adora was authorized to receive it

HELD: YES. petition is DENIED

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.
SEC. 306. xxx xxx xxx

Any insurance company which delivers to an insurance agant or insurance broker a policy or contract of insurance
shall be demmed to have authorized such agent or broker to receive on its behalf payment of any premium which is
due on such policy or contract of insurance at the time of its issuance or delivery or which becomes due thereon.
Payment to an agent having authority to receive or collect payment is equivalent to payment to the principal
himself; such payment is complete when the money delivered is into the agent's hands and is a discharge of the
indebtedness owing to the principal.
SEC. 64. No policy of insurance other than life shall be cancelled by the insurer except upon prior notice
thereof to the insured, and no notice of cancellation shall be effective unless it is based on the occurrence, after
the effective date of the policy, of one or more of the following:

(a) non-payment of premium;

(b) conviction of a crime arising out of acts increasing the hazard insured against;

(c) discovery of fraud or material misrepresentation;

(d) discovery of willful, or reckless acts or commissions increasing the hazard insured against;

(e) physical changes in the property insured which result in the property becoming uninsurable;or

(f) a determination by the Commissioner that the continuation of the policy would violate or would place the insurer
in violation of this Code.

As for the method of cancellation, Section 65 provides as follows:

SEC. 65. All notices of cancellation mentioned in the preceding section shall be in writing, mailed or delivered
to the named insured at the address shown in the policy, and shall state (a) which of the grounds set forth in
section sixty-four is relied upon and (b) that, upon written request of the named insured, the insurer will furnish
the facts on which the cancellation is based.
A valid cancellation must, therefore, require concurrence of the following conditions:

(1) There must be prior notice of cancellation to the insured;

(2) The notice must be based on the occurrence, after the effective date of the policy, of one or more of the grounds
mentioned;
(3) The notice must be (a) in writing, (b) mailed, or delivered to the named insured, (c) at the address shown in the
policy;

(4) It must state (a) which of the grounds mentioned in Section 64 is relied upon and (b) that upon written request of
the insured, the insurer will furnish the facts on which the cancellation is based.
All MICO's offers to show that the cancellation was communicated to the insured is its employee's testimony
that the said cancellation was sent "by mail through our mailing section." without more
It stands to reason that if Pinca had really received the said notice, she would not have made payment on the
original policy on December 24, 1981. Instead, she would have asked for a new insurance, effective on that date
and until one year later, and so taken advantage of the extended period.
Incidentally, Adora had not been informed of the cancellation either and saw no reason not to accept the said
payment
Although Pinca's payment was remitted to MICO's by its agent on January 15, 1982, MICO sought to return it to
Adora only on February 5, 1982, after it presumably had learned of the occurrence of the loss insured against on
January 18, 1982 make the motives of MICO highly suspicious

Malayan Insurance Co. Inc. v Arnaldo (Insurance)

G.R. No. L-67835 October 12, 1987

MALAYAN INSURANCE CO., INC. (MICO), petitioner, vs. GREGORIA CRUZ ARNALDO, in her capacity as
the INSURANCE COMMISSIONER, and CORONACION PINCA, respondents.

FACTS:
On June 7, 1981, the petitioner (hereinafter called (MICO) issued to the private respondent, Coronacion Pinca, Fire
Insurance Policy No. F-001-17212 on her property for the amount of P14,000.00 effective July 22, 1981, until July 22,
1982.
On October 15,1981, MICO allegedly cancelled the policy for non-payment, of the premium and sent the corresponding
notice to Pinca.
On December 24, 1981, payment of the premium for Pinca was received by Domingo Adora, agent of MICO. On January
15, 1982, Adora remitted this payment to MICO, together with other payments. On January 18, 1982, Pinca's property
was completely burned.

DECISION OF LOWER COURTS:

(1) Insurance Commission: granted claim for compensation for burned property.

ISSUE:
Whether there was a valid insurance contract at the time of the loss.

RULING:
Yes.
A valid cancellation must, therefore, require concurrence of the following conditions:
(1) There must be prior notice of cancellation to the insured;
(2) The notice must be based on the occurrence, after the effective date of the policy, of one or more of the grounds
mentioned;
(3) The notice must be
(a) in writing,
(b) mailed, or delivered to the named insured,
(c) at the address shown in the policy;
(4) It must state
(a) which of the grounds mentioned in Section 64 is relied upon and
(b) that upon written request of the insured, the insurer will furnish the facts on which the cancellation is based.
MICO's claims it cancelled the policy in question on October 15, 1981, for non-payment of premium. To support this
assertion, it presented one of its employees, who testified that "the original of the endorsement and credit memo"
presumably meaning the alleged cancellation "were sent the assured by mail through our mailing section" However,
there is no proof that the notice, assuming it complied with the other requisites mentioned above, was actually mailed
to and received by Pinca.
We also look askance at the alleged cancellation, of which the insured and MICO's agent himself had no knowledge,
and the curious fact that although Pinca's payment was remitted to MICO's by its agent on January 15, 1982, MICO
sought to return it to Adora only on February 5, 1982, after it presumably had learned of the occurrence of the loss
insured against on January 18, 1982. These circumstances make the motives of the petitioner highly suspect, to say
the least, and cast serious doubts upon its candor and bona fides.
MALAYAN INSURANCE CO., INC., Petitioner,
vs.
PHILIPPINES FIRST INSURANCE CO., INC. and REPUTABLE FORWARDER SERVICES,
INC., Respondents.
FACTS
Wyeth contracted a contract of carriage with Republic, a common carrier for the transport of its goods
and product. Wyeth insured the goods with Philippine First , while Republic insured the same goods
with Malayan insurance. During transit, certain goods were lost due to hijacking of 10 armed men.
Philippine first paid the proceeds to Wyeth, subrogating the rights of wyeth to Philippine first which
filed a claim against Republic and Malayan as a 3rd party defendant. Republic and Malayan refused
the claim of Philippine first. Malayan contended that there was double insurance and that the first
insurer, Philippine First, should bear all the loss.
ISSUE
W/N Malayan is liable? - YES
W/N there is double insurance? -NO
W/N Malayan is solidarily liable with Republic? - NO
HELD
Malayan is liable because of the insurance contract it executed with Republic for the indemnity for the
loss. The cause of the loss not within the purview of an excepted peril, having been determined in the
lower courts is conclusive upon the SC making Malayan liable for the indemnity.
There is double insurance when:
1] The person insured is the same2] 2 or more insurers insuring separately3] There is identity of
subject matter4] There is identity of interest insured5] There is identity of the risk or peril insured
against. In the case at bar though the 2 insurance policy, one by Philippine first and one by Malayan
were issued over the same subject matter covering the same peril, it was issued to 2different persons
and to 2 different interest, Philippine first insured wyeth over its own goods
Malayan insured republic over the latters insurable interest over the safety of the goods which could
become the basis for liability in case of loss or damage.Malayan is not solidarily liable with Republic
because they have different sources from which their liability arose. Republic arose due to a contract
of carriage, while Malayan is that of contract.Solidarity exist only by express stipulation of the parties
or those provided by law, none of which is applicable in the present case.

MALAYAN VS PHILIPPINES FIRST (G.R. NO. 184300 JULY 11, 2012)

Malayan Insurance Co., Inc vs Philippines First Insurance Co., Inc

G.R. No. 184300 July 11, 2012

Facts: Since 1989, Wyeth Philippines, Inc. (Wyeth) and respondent Reputable Forwarder Services, Inc. (Reputable) had
been annually executing a contract of carriage, whereby the latter undertook to transport and deliver the formers
products to its customers, dealers or salesmen. On November 18, 1993, Wyeth procured Marine Policy No. MAR 13797
(Marine Policy) from respondent Philippines First Insurance Co., Inc. (Philippines First) to secure its interest over its own
products. Philippines First thereby insured Wyeths nutritional, pharmaceutical and other products usual or incidental
to the insureds business while the same were being transported or shipped in the Philippines. The policy covers all
risks of direct physical loss or damage from any external cause, if by land, and provides a limit of P6,000,000.00 per
any one land vehicle. On December 1, 1993, Wyeth executed its annual contract of carriage with Reputable. It turned
out, however, that the contract was not signed by Wyeths representative/s. Nevertheless, it was admittedly signed by
Reputables representatives, the terms thereof faithfully observed by the parties and, as previously stated, the same
contract of carriage had been annually executed by the parties every year since 1989. Under the contract, Reputable
undertook to answer for all risks with respect to the goods and shall be liable to the COMPANY (Wyeth), for the loss,
destruction, or damage of the goods/products due to any and all causes whatsoever, including theft, robbery, flood,
storm, earthquakes, lightning, and other force majeure while the goods/products are in transit and until actual delivery
to the customers, salesmen, and dealers of the COMPANY. The contract also required Reputable to secure an
insurance policy on Wyeths goods. Thus, on February 11, 1994, Reputable signed a Special Risk Insurance Policy (SR
Policy) with petitioner Malayan for the amount of P1,000,000.00. On October 6, 1994, during the effectivity of the
Marine Policy and SR Policy, Reputable received from Wyeth 1,000 boxes of Promil infant formula worth P2,357,582.70
to be delivered by Reputable to Mercury Drug Corporation in Libis, Quezon City. Unfortunately, on the same date, the
truck carrying Wyeths products was hijacked by about 10 armed men. They threatened to kill the truck driver and two
of his helpers should they refuse to turn over the truck and its contents to the said highway robbers. The hijacked truck
was recovered two weeks later without its cargo. Malayan questions its liability based on sections 5 and 12 of the SR
Policy.

Issue: Whether or not there is double insurance in this case such that either Section 5 or Section 12 of the SR Policy
may be applied.

Held: No. By the express provision of Section 93 of the Insurance Code, double insurance exists where the same
person is insured by several insurers separately in respect to the same subject and interest. The requisites in order for
double insurance to arise are as follows:

1. The person insured is the same;

2. Two or more insurers insuring separately;
3. There is identity of subject matter;
4. There is identity of interest insured; and
5. There is identity of the risk or peril insured against.

In the present case, while it is true that the Marine Policy and the SR Policy were both issued over the same subject
matter, i.e. goods belonging to Wyeth, and both covered the same peril insured against, it is, however, beyond cavil
that the said policies were issued to two different persons or entities. It is undisputed that Wyeth is the recognized
insured of Philippines First under its Marine Policy, while Reputable is the recognized insured of Malayan under the SR
Policy. The fact that Reputable procured Malayans SR Policy over the goods of Wyeth pursuant merely to the stipulated
requirement under its contract of carriage with the latter does not make Reputable a mere agent of Wyeth in obtaining
the said SR Policy.

The interest of Wyeth over the property subject matter of both insurance contracts is also different and distinct from
that of Reputables. The policy issued by Philippines First was in consideration of the legal and/or equitable interest of
Wyeth over its own goods. On the other hand, what was issued by Malayan to Reputable was over the latters
insurable interest over the safety of the goods, which may become the basis of the latters liability in case of loss or
damage to the property and falls within the contemplation of Section 15 of the Insurance Code.

Therefore, even though the two concerned insurance policies were issued over the same goods and cover the same
risk, there arises no double insurance since they were issued to two different persons/entities having distinct insurable
interests. Necessarily, over insurance by double insurance cannot likewise exist. Hence, as correctly ruled by the RTC
and CA, neither Section 5 nor Section 12 of the SR Policy can be applied.

Pioneer v Yap G.R. No. L-36232 December 19, 1974

J. Fernandez

Facts:
Respondent Oliva Yap was the owner of a store in a two-storey building where she sold shopping bags and footwear.
Chua Soon Poon, her son-in-law, was in charge of the store.
Yap took out a Fire Insurance Policy No. 4216 from Pioneer Insurance with a value of P25,000.00 covering her stocks,
office furniture, fixtures and fittings.
Among the conditions in the policy executed by the parties are the following:
unless such notice be given and the particulars of such insurance or insurances be stated in, or endorsed on this Policy
by or on behalf of the Company before the occurrence of any loss or damage, all benefits under this Policy shall be
forfeited Any false declaration or breach or this condition will render this policy null and void.
Another insurance policy for P20,000.00 issued by Great American covering the same properties. The endorsement
recognized co-insurance by Northwest for the same value.
Oliva Yap took out another fire insurance policy for P20,000.00 covering the same properties from the Federal
Insurance Company, Inc., which was procured without notice to and the written consent of Pioneer.
A fire broke out in the building, and the store was burned. Yap filed an insurance claim, but the same was denied for a
breach.
Oliva Yap filed a case for payment of the face value of her fire insurance policy. The insurance company refused to pay
because she never informed Pioneer of another insurer. The trial court decided in favor of Yap. The CA affirmed.
Issue:
Whether or not petitioner should be absolved from liability on the Pioneeer policy on account of any violation of the co-
insurance clause

Held: No. Petition dismissed.

Ratio:
There was a violation. The insurance policy for P20,000.00 issued by the Great American, ceased to be recognized by
them as a co-insurance policy.
The endorsement shows the clear intention of the parties to recognize on the date the endorsement was made, the
existence of only one co-insurance, the Northwest one. The finding of the Court of Appeals that the Great American
Insurance policy was substituted by the Federal Insurance policy is indeed contrary to said stipulation.
Other insurance without the consent of Pioneer would avoid the contract. It required no affirmative act of election on
the part of the company to make operative the clause avoiding the contract, wherever the specified conditions should
occur. Its obligations ceased, unless, being informed of the fact, it consented to the additional insurance.
The validity of a clause in a fire insurance policy to the effect that the procurement of additional insurance without the
consent of the insurer renders the policy void is in American jurisprudence.
Milwaukee Mechanids' Lumber Co., vs. Gibson- "The rule in this state and practically all of the states is to the effect
that a clause in a policy to the effect that the procurement of additional insurance without the consent of the insurer
renders the policy void is a valid provision.
In this jurisdiction, General Insurance & Surety Corporation vs. Ng Hua- The annotation then, must be deemed to be a
warranty that the property was not insured by any other policy. Violation thereof entitled the insurer to rescind.
Furthermore, even if the annotations were overlooked the defendant insurer would still be free from liability because
there is no question that the policy issued by General Indemnity has not been stated in nor endorsed on Policy No. 471
of defendant. The obvious purpose of the aforesaid requirement in the policy is to prevent over-insurance and thus
avert the perpetration of fraud where a fire would be profitable to the insured.