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    Pedro Arce Vs Capital Insurance

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    JVM
    The Supreme Court ruled that Pedro Arce cannot claim indemnity from Capital Insurance despite the loss of his home by fire. The renewal premium on the fire insurance policy had not been paid by the due date or the extended due date provided by the insurance company. Both the Insurance Act and the terms of the policy state that a policy is not valid or binding until the full premium has been paid. While sympathetic to Arce's loss, the Court found that the law and the policy terms supported the insurance company's denial of the claim due to non-payment of premiums.

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    Pedro Arce Vs Capital Insurance

    Uploaded by

    JVM
    90 views2 pages
    The Supreme Court ruled that Pedro Arce cannot claim indemnity from Capital Insurance despite the loss of his home by fire. The renewal premium on the fire insurance policy had not been paid by the due date or the extended due date provided by the insurance company. Both the Insurance Act and the terms of the policy state that a policy is not valid or binding until the full premium has been paid. While sympathetic to Arce's loss, the Court found that the law and the policy terms supported the insurance company's denial of the claim due to non-payment of premiums.

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    Arce v Capital Insurance

    Original Title

    9. Pedro Arce vs Capital Insurance

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    The Supreme Court ruled that Pedro Arce cannot claim indemnity from Capital Insurance despite the loss of his home by fire. The renewal premium on the fire insurance policy had not been paid by the due date or the extended due date provided by the insurance company. Both the Insurance Act and the terms of the policy state that a policy is not valid or binding until the full premium has been paid. While sympathetic to Arce's loss, the Court found that the law and the policy terms supported the insurance company's denial of the claim due to non-payment of premiums.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    90 views2 pages

    Pedro Arce Vs Capital Insurance

    Uploaded by

    JVM
    The Supreme Court ruled that Pedro Arce cannot claim indemnity from Capital Insurance despite the loss of his home by fire. The renewal premium on the fire insurance policy had not been paid by the due date or the extended due date provided by the insurance company. Both the Insurance Act and the terms of the policy state that a policy is not valid or binding until the full premium has been paid. While sympathetic to Arce's loss, the Court found that the law and the policy terms supported the insurance company's denial of the claim due to non-payment of premiums.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    PEDRO ARCE vs.THE CAPITAL INSURANCE & SURETY CO., INC.

    ,
    G.R. No. L-28501 September 30, 1982
    ABAD SANTOS, J.

    DOCTRINE:
    SEC. 72. An insurer is entitled to payment of premium as soon as the thing
    insured is exposed to the perils insured against, unless there is clear agreement to
    grant credit extension for the premium due. No policy issued by an insurance company
    is valid and binding unless and until the premium thereof has been paid "

    FACTS:
    The INSURED was the owner of a residential house in Tondo, Manila, which had
    been insured with the COMPANY since 1961 under Fire Policy No. 24204. On
    November 27, 1965, the COMPANY sent to the INSURED Renewal Certificate No.
    47302 to cover the period December 5, 1965 to December 5, 1966. The COMPANY
    also requested payment of the corresponding premium in the amount of P 38.10.

    Anticipating that the premium could not be paid on time, the INSURED, thru his
    wife, promised to pay it on January 4, 1966. The COMPANY accepted the promise but
    the premium was not paid on January 4, 1966. On January 8, 1966, the house of the
    INSURED was totally destroyed by fire.

    On January 10, 1966, INSURED's wife presented a claim for indemnity to the
    COMPANY. She was told that no indemnity was due because the premium on the
    policy was not paid. Nonetheless the COMPANY tendered a check for P300.00 as
    financial aid which was received by the INSURED's daughter, Evelina R. Arce. the
    COMPANY reiterated that the check was given "not as an obligation, but as a
    concession" because the renewal premium had not been paid, The INSURED cashed
    the check but then sued the COMPANY on the policy.

    ISSUE:
    Whether or not Pedro Arce can claim for indemnity against Capital Insurance
    even if he has not fully paid the premium on the policy?

    RULING:
    Sec. 72 of the Insurance Act, as amended by R.A. No. 3540 reads:

    SEC. 72. An insurer is entitled to payment of premium as soon as the


    thing insured is exposed to the perils insured against, unless there is clear
    agreement to grant credit extension for the premium due. No policy issued
    by an insurance company is valid and binding unless and until the
    premium thereof has been paid "
    Morever, the parties in this case had stipulated:

    IT IS HEREBY DECLARED AND AGREED that notwithstanding anything


    to the contrary contained in the within policy, this insurance will be
    deemed valid and binding upon the Company only when the premium and
    documentary stamps therefor have actually been paid in full and duly
    acknowledged in an official receipt signed by an authorized
    official/representative of the Company, "

    It is obvious from both the Insurance Act, as amended, and the stipulation of the
    parties that time is of the essence in respect of the payment of the insurance premium
    so that if it is not paid the contract does not take effect unless there is still another
    stipulation to the contrary. In the instant case, the INSURED was given a grace period
    to pay the premium but the period having expired with no payment made, he cannot
    insist that the COMPANY is nonetheless obligated to him.

    We commiserate with the INSURED. We are aware that many insurance


    companies have fallen into the condemnable practice of collecting premiums promptly
    but resort to all kinds of excuses to deny or delay payment of just claims. Unhappily the
    instant case is one where the insurer has the law on its side.

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