Malayan Insurance Co., Inc. vs. Cruz Arnaldo (Insurance Law)

Malayan Insurance Co., Inc. vs. Cruz Arnaldo

(Insurance Law)

154 SCRA 672 (G.R. No. L-67835)

October 12, 1987

Petitioners:	Malayan Insurance Co., Inc. (MICO)
Respondents:	Gregoria Cruz Arnaldo, in her capacity as the Insurance Commissioner and Coronacion Pinca

J. Cruz:

FACTS:

On June 7, 1981, the petitioner Malayan Insurance Co., (MICO) issued to respondent, Coronacion Pinca, a Fire Insurance Policy on her property for ₱100,000.00, effectively 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.

On 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.

In due time, Pinca made the prerequisite demands for payment, which MICO rejected. She then went to the Insurance Commission. It is because she was ultimately sustained by the latter that MICO has come to us for relief.

ISSUE:

Whether there is a valid insurance contract at the time of the loss.

HELD:

Yes. MICO 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. All MICO 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. The petitioner then says that its "stand is enervated (sic) by the legal presumption of regularity and due performance of duty," (not realizing perhaps that "enervated" means "debilitated," not "strengthened").