45. G.R. No. 137172. June 15, 1999 UCPB GENERAL INSURANCE CO., INC. vs.

MASAGANA ELAMAR , INC. !AC S" On April 15, 1991, petitioner issued five (5) insurance policies covering respondent's various property described therein against fire, for the period from May , 1991 to May , 199 ! "n March 199 , petitioner evaluated the policies and decided not to rene# them upon e$piration of their terms on May , 199 ! %etitioner advised respondent's bro&er, 'uellig "nsurance (ro&ers, "nc! of its intention not to rene# the policies! On April ), 199 , petitioner gave #ritten notice to respondent of the non*rene#al of the policies at the address stated in the policies! On +une 1,, 199 , fire ra-ed respondent's property covered by three of the insurance policies petitioner issued! On +uly 1,, 199 , respondent presented to petitioner's cashier at its head office five (5) manager's chec&s in the total amount of % 5,.5,!95, representing premium for the rene#al of the policies from May , 199 to May , 199,! /o notice of loss #as filed by respondent under the policies! 0espondent filed #ith petitioner its formal claim for indemnification of the insured property ra-ed by fire! On the same day, +uly 11, 199 , petitioner returned to respondent the five (5) manager's chec&s that it tendered, and at the same time re2ected respondent's claim for the reasons (a) that the policies had e$pired and #ere not rene#ed, and (b) that the fire occurred on +une 1,, 199 , before respondent's tender of premium payment! 3he 034 rendered a decision in favor of the plaintiff, ordering the defendant to pay plaintiff the sums of5 (a) %16,)15,777!77 representing the latter's claim for indemnity! 3he 4A affirmed the decision of the 034 and held that follo#ing previous practice, respondent #as allo#ed a si$ty ()7) to ninety (97) day credit term for the rene#al of its policies, and that the acceptance of the late premium payment suggested an understanding that payment could be made later! ISSUE" 8hether the fire insurance policies had been e$tended or rene#ed by an implied credit arrangement though actual payment of premium #as tendered on a later date after the occurrence of the ris& (fire) insured against! #EL$" NO. 3he ans#er is easily found in the "nsurance 4ode! /o, an insurance policy, other than life, issued originally or on rene#al, is not valid and binding until actual payment of the premium! Any agreement to the contrary is void!911: 3he parties may not agree e$pressly or impliedly on the e$tension of credit or time to pay the premium and consider the policy binding before actual payment!

3he case of Malayan "nsurance 4o!, "nc! vs! 4ru-*Arnaldo, 91 : cited by the 4ourt of Appeals, is not applicable! "n that case, payment of the premium #as in fact actually made on ;ecember 1, 1961, and the fire occurred on +anuary 16, 196 ! <ere, the payment of the premium for rene#al of the policies #as tendered on +uly 1,, 199 , a month %&'e( ')e &*(e o++u((e, on June 13, 1992. 3he assured did not even give the insurer a notice of loss #ithin a reasonable time after occurrence of the fire!