Tibay vs.

eke k

IN JANUARY 22, 1987 the petitioner violeta r. tibay and Nicholas Ronaldo obtained a fire
insurance for on their two-story residential building from Fortune life and general insurance
com,inc. The said fire insurance covers from Jan. 23,1987 to January 23,1988 of the total
premium of P 2, 983.50 on Jan. 23, 1987 , Violeta the petitioner only paid P 600.00 as partial
payment.
On march 8,1987 the insured building was burned . march 10 or two days after
the fire, Violeta paid the balance of the premium. On the same day she filed the claim.

In the letter dated june 11,1987 fortune denied the claim for violation of policy no. 2, section 22 of
insurance code. Fortune refused to pay their insurance claim because they are not liable due to non-
payment by petitioner of the full amount of the premium stated in the policy.

Violeta and other petitioners filled a case for damages against said private respondents . The
trial court ruled for petitioners and made Fortune liable for the insured building and their personal
Properties. The case was applied to the Court of appeals reversing the lower court removing liability
from Fortune After returning the premium.

Hence this petition for review.

ISSUE :

Whether or not the partial payment of the premium of policy becomes invalid and not binding?

Yes.

Under section 77 of the insurance code the insurer is entitled to payment of the premium as soon as the
thing insured the contrary, no to contrary, no policy or contract of insurance 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. Since the petitioner only made partial provision applies. Since the petitioner only made partial
payment with remaining balance paid only after the fire has occurred, the contract did not take effect
to the insured from claiming or getting from the loss of her building.

2. Ucpb
 Masagana telemart Inc. obtained 5 insurance policies from ucbp for its properties . The
effectively of all Policies runs from 4 pm of may 22, 1991 to 4pm may 22, 1992. On april 6, 1992
petitioner gave a written notice to respondent of the non renewal of the policies. Unfortunately June
13,1992, the plaintiffs properties were razed by fire. Then on July 13,1992 the respondent paid using
five equitable bank managers check as a renewal premium payments. The ucpb general insurance co,
inc. also issued an official receipt for the direct premium. Now Masagana , the respondent made its
formal demand for the indemnification for the burned insured properties. ON The same day, the
defendant returned the five checks. Stating in its letter that it was rejecting masaganas claim on the
following grounds :

1 Said policies expired last May 22,1992 and were not renewed for another term;
2 Defendant had put plaintiff and its alleged broker on notice of non- renewal earlier;
3 3. The properties covered by the said policies were burned in a fire that took last last june
13,1992 on berofe tender of premium payment.
Hence the respondent filed a case.
RTC rendered judgment in favor of the respondent. The petitioner appealed to the court of appeals. The
court of Appeals promulgated its decision affirming that of the Rtc with modification. The case was
appealed to the Supreme court on the issue of whether the fire insurance policies issued by the
petitioner to the respondent had been extended or renewed by an implied credit arrangement though
actual payment of premium was tendered on a later date and after the occurrence of the risk insured
against. The supreme court revised and set aside the decision of the court of appeal respondent
seasonably filed a motion for reconsideration of the adverse verdict. The court affirmed that there was
no valid notice of non renewal of policies, as there is no proof at all that the notice was received by
MASAGANA. Thus, the policies in question were renewed by operation of law and were effective and
valid , since the premiums were paid with in 60- to 90 day credit term.
Issue :
Whether section 77 of the insurance code of 1978 must be strictly applied to the petitioners advantage
despite its practice of granting a 60- 90 day credit term for the payment of premiums.
Held :
No. petition Denied.
Sec. 77 provides that no policy are contract of insurance issued by an issuance company is valid and
binding unless and until the premium thereof has been paid, except in the case of a life or industrial life
policy. Whenever the grace period provision applies, an exception to yhis is provided by sec. 78; ANY
Acknowledgement in a policy or contract of insurance of the receipt of premium is conclusive evidence
of its payment ,so far as to make the policy binding, not withstanding any stipulation therein that it shall
not be binding until premium is actually paid. Finally in the instant case, It would be unjust and equitable
if recovery of the policy would not be permitted against petitioner, which had consistently granted a 60-
90 day credit term for the payment of premium despite of its full awareness of section 77. Estoppel bars
it from taking refuge since masagana relied in good faith on such practice.
3. philam care.
Facts ;
Ernani trinos, deceased husband of julita trinos applied for a health care coverage with
petitioner philam care. Ernani answered no to the questions asking if he or his family members were
treated to heart trouble , asthma, diabetes, and others. The application was approved for a period of
one year. Upon termination, the same was extended for another year from march 1, 1989 to march
1,1990, then from march 1, 1990 to june 1, 1990. The amount coverage was increased to maximum sum
of 75,000 per disability. During the period of his coverage he suffered from heart attack and was
confined. The wife tried to claim the benefits but the petitioner denied it under for concealment of his
medical history. The respondent had to pay the bills. The husband subsequently passed away. Then
respondent instituted with the rtc an action for damages against petitioner. The court rendered
judgment in favor of the respondent Julita. On appeal , the court of Appeals affirmed the decision of the
lower court but deleted all awards for damages and absolve petitioner. The petitioner filed a motion for
reconsideration but denied. Hence petitioner brought the instant petition for review.

Issue :
Whether or not A health care agreement is not an insurance contract; hence, the incontestability clause
under the insurance code does not apply.

Answer :
No petition was dismissed.
Petitioner argues that the agreement grants living benefit which a member may immediately
enjoy so as long as he is alive upon effectively of the agreement. Since health care agreement are only
for a period of one year, the petitioner argues that the incontestability clause does not apply, as the
same requires an effectively period of at least two years. Section 2 paragraph 1 of insurance code
provides that an agreement were by one undertakes for a consideration to indemnify another against
lost, damages, or liability arising from an unknown event or contingent event . section 3 states any
contingent or unknown event, whether past or future, may damnify a person having an insurable
interest against him, maybe insured against. Every person has an insurable interest in the life and health
of himself. In the case at bar, the husbands health was the insurable interest. A health care agreement
was in the nature of non life insurance which is primarily, a contract of indemnity. The health care
provider must pay for the medical expenses resulting from sickness and injury. In the petitioner
arguments of concealment, it appears that in the application for the health coverage the late husband
was required by the petitioner to sign an express authorization for the furnishing of any of all
information relatives, to any hospitalization, consultation, treatment or any other medical advice or
examination. Under section 27,a concealment entitles to rescind a contract of insurance. The
cancellation of heath care agreement as in insurance policies requires the concurrence of the following
condition;

1. Prior notice of cancellation to insured;

2. Notice must be based on the occurrence after effective date of the policy of one or more of
the grounds mention.
 3. Must be in writing, mailed or delivered to the insured at the address shown in the policy
4. Must state the grounds relied upon provided In section 64 of the insurance code and upon
the request of the insured, to furnish facts on which cancellation is based.

None were fulfilled by the petitioner. Finally the petitioner alleged that the respondent was not the
legal wife. The agreement is in the nature of the contract of indemnity. Hence, payment should be
made to the party who incurred the expenses . it is not controverted that the respondent paid all the
medical expenses. She is therefore entitled to reimbursement.