Makati Tuscany Condo v.

CA Premiums paid in installments; waiver of

prepayment of premiums; valid and binding though not fully paid. American
Home Assurance Co. (AHAC) issued in favor of Makati Tuscany an Insurance policy
on Makati Tuscanys property. Tuscany paid premiums in installments which AHAC
accepted for March !"#$March !"%& March !"%$!"' and March !"'$!"(.
However& in the !"'$!"( renewal& Tuscany only made two payments and refused
to pay the rest )ecause it claims that the *olicy does not have a credit clause and it
states that the Insurance Company would not )e lia)le for any loss when the *olicy is
not yet fully paid. Tuscany claims that there would )e no risk that can attach to this
policy )ecause of the manner of payment of the *remiums. The Court held that
Tuscany cannot rene+e on its responsi)ility to pay the premiums on the +round of
estoppel and )ecause the insurance policy is already deemed to )e )indin+ and
effective thou+h the premiums were paid )y installments. The acceptance )y AHAC
of the premiums in the previous years indicates that it would honor the policies it
issued and this makes them lia)le even if the policy states that they can deny lia)ility
when the premiums are not yet fully paid. Thou+h ,ec. - states that full payment of
premiums is re.uired to make a policy effective& ,ec. -" provides and e/ception& a
waiver of the need for complete prepayment )y makin+ an acknowled+ment in the
insurance policy of receipt of premium as conclusive evidence of payment. 0hat ,ec.
-- prohi)its is a stipulation that a policy will )e effective thou+h no premiums are
paid. It allows credit e/tension.
unlife Assurance Co. v. CA Plane Crash; Concealment of the fact of
hospitali!ation; "ood faith not a defense in concealment; 1o)ert 2acani
insured his life with ,unlife Assurance in a plicy valued at 33&333.33 with dou)le
indemnity in case of accidental death with his mother& 2ernarda& as )eneficiary.
1o)ert died in a plane crash so 2ernarda went to ,unlife to claim the insurance.
,unlife refused to pay claimin+ that 1o)erto did not disclose that he was hospitali4ed
two weeks prior to his filin+ of the insurance application. The lower court held that
since the hospitali4ation is immaterial to an accidental death& 1o)erto did not need to
disclose such fact to ,unlife. However& the court held that ,unlife is not lia)le
)ecause accordin+ to ,ec. %& materiality is to )e determined not )y the event )ut
on the pro)a)le and reasona)le influence of the facts upon the party to whom
communication is due& in formin+ his estimate of the advanta+es and disadvanta+es
of the proposed contract. Had 1o)erto disclosed this fact& ,unlife could have
increased the premiums re.uired of him or re.uired him to under+o a medical e/am&
or even re5ect his application. The fact that he was hospitali4ed only two weeks prior
makes it suspicious that he did not disclose such fact.