G.R. No. 130421 - AMERICAN HOME ASSURANCE COMPANY, VS. ANTONIO CHUA. D E C I S I O N - Supreme Court E-Library

Ruling

WHEREFORE, judgment is hereby rendered in favor of [respondent] and against the [petitioner] ordering the latter to pay the former the following: P200,000.00, representing the amount of the insurance, plus legal interest from the date of filing of this case; P200,000.00 as moral damages; P200,000.00 as loss of profit; P100,000.00 as exemplary damages; P50,000.00 as attorney's fees; and Cost of suit. On appeal, the assailed decision was affirmed in toto by the Court of Appeals. The Court of Appeals found that respondent's claim was substantially proved and petitioner's unjustified refusal to pay the claim entitled respondent to the award of damages. Its motion for reconsideration of the judgment having been denied, petitioner filed the petition in this case. Petitioner reiterates its stand that there was no existing insurance contract between the parties. It invokes Section 77 of the Insurance Code, which provides: An insurer is entitled to payment of the premium as soon as the thing insured is exposed to the peril insured against. Notwithstanding any agreement to the contrary, no policy or contract of insurance issued by an insurance company is valid and binding unless and until the premium thereof has been paid, except in the case of life or an industrial life policy whenever the grace period provision applies. and cites the case of Arce v. Capital Insurance & Surety Co., Inc., [2] where we ruled that unless and until the premium is paid there is no insurance. Petitioner emphasizes that when the fire occurred on 6 April 1990 the insurance contract was not yet subsisting pursuant to Article 1249 [3] of the Civil Code, which recognizes that a check can only effect payment once it has been cashed. Although respondent testified that he gave the check on 5 April to a certain James Uy, the check, drawn against a Manila bank and deposited in a Cagayan de Oro City bank, could not have been cleared by 6 April, the date of the fire. In fact, the official receipt issued for respondent's check payment was dated 10 April 1990, four days after the fire occurred. Citing jurisprudence, [4] petitioner also contends that respondent's non-disclosure of the other insurance contracts rendered the policy void. It underscores the trial court's neglect in considering the Commission on Audit's certification that the BIR receipts submitted by respondent were, in effect, fake since they were issued to other persons. Finally, petitioner argues that the award of damages was excessive and unreasonable considering that it did not act in bad faith in denying respondent's claim. Respondent counters that the issue of non-payment of premium is a question of fact which can no longer be assailed. The trial court's finding on the matter, which was affirmed by the Court of Appeals, is conclusive. Respondent refutes the reason for petitioner's denial of his claim. As found by the trial court, petitioner's loss adjuster admitted prior knowledge of respondent's existing insurance contra