No. L-11728.

May 15, 1959 Plaintiff : LEONA PAULINO Defendant : THE CAPITAL INSURANCE & SURETY COMPANY, INC. FACTS: This is an appeal from the decision of the Court of First Instance of Albay, dismissing an action for recovery of amount of fire insurance policy. Paulino was the owner of the JUNIOR CAFE, BAKERY & GROCERY STORE She accepted a fire insurance policy issued by the defendant and that on April 30, 1952, the plaintiff wrote the defendant requesting cancellation of the policy, which the latter received on May 10, 1952 The plaintiff did not return the policy or demanded for the return of the proportionate premium and neither did the defendant offer to return the premium The property covered by the policy was destroyed by fire on August 16, 1952. The defendant refused to make payment on plaintiff's claim, on the ground that the policy was cancelled as of May 10, 1952. Plaintiff contends in this appeal that her letter, dated April 30, 1952, was a mere request or offer to cancel the policy and did not terminate the same since it was not accompanied by the surrender of the policy for cancellation.

ISSUE: W/N Capital Insurance was liable (NO) RATIO: This case hinges on the interpretation of paragraph 10 of the policy, reading: o This insurance may be terminated at any time at the request of the Insured, in which case the Company will retain the customary short period rate for the time the policy has been in force. This insurance may also at any time be terminated at the option of the Company, on notice to that effect being given to the Insured, in which case the Company shall be liable to repay on demand a ratable proportion of the premium for the expired term from the date of cancelment." Pursuant to this stipulation, the contract in question could be terminated, "at any time", upon the unilateral act of either party. Whichever party exercised the "option", did not need the approval, consent or concurrence of the other thereto. That consent was given at the time of the making of the contract. Moreover, pursuant to her letter, plaintiff considered the contract terminated upon receipt of said letter by the defendant ("desde el recibo de la presente). Furthermore, the case of Buckley vs. Citizens Insurance Co. (81 N.E. 165) relied upon by the plaintiff is not in point. Although the insurance policy involved in that case contained a clause analogous to the one involved here, the option was exercised therein, not by the insured, but by the insurance company, which likewise, requested the return of the policy. Upon receipt of the communication of the company to this effect, the insured returned the policy. Subsequently, but before the corresponding portion of the premium had been refunded to the insured, the property was destroyed by fire. Upon these facts, the insured was not entitled to collect the amount of the policy, because the unconditional return thereof upon request of the company implied "a waiver of his right to treat the policy as in full force and effect until the company paid or tendered to him the unearned premium." Decision affirmed.