41. G.R. No. L-67835 October 12, 1987 MALAYAN INSURANC CO., INC. !MICO" #$.

GR GORIA CRU% ARNAL&O, '( )er c*+*c't, *$ t)e INSURANC COMMISSION R, *(- CORONACION .INCA /AC0S1 In the instant case the private respondent has been sustained by the Insurance Commission in her claim for compensation for her burned property. The petitioner is now before us to dispute the decision, 1 on the ground that there was no valid insurance contract at the time of the loss. The petitioner (hereinafter called (MICO issued to the private respondent, Coronacion !inca, "ire insurance policy on her property for the amount of !1#,$$$.$$ effective %uly &&, 1'(1, until %uly &&, 1'(&. & On October 1),1'(1, MICO allegedly cancelled the policy for non*payment, of the premium and sent the corresponding notice to !inca. + On ,ecember &#, 1'(1, payment of the premium for !inca was received by ,omingo -dora, agent of MICO. # On %anuary 1), 1'(&, -dora remitted this payment to MICO,together with other payments. ) On %anuary 1(, 1'(&, !inca.s property was completely burned. / On "ebruary ), 1'(&, !inca.s payment was returned by MICO to -dora on the ground that her policy had been cancelled earlier. 0ut -dora refused to accept it. !inca made the re1uisite demands for payment, which MICO re2ected. 3he then went to the Insurance Commission. It is because she was ultimately sustained by the public respondent that the petitioner has come to us for relief. ISSU 1 4hether there was payment of premium and, conse1uently, a valid insurance contract at the time of the loss. 2 L&1 Y S. MICO.s arguments that there was no payment of premium and that the policy had been cancelled before the occurrence of the loss are not acceptable. Its contention that the claim was allowed without proof of loss is also untenable. The petitioner relies heavily on Sect'o( 77 of the Insurance Code. The above provision is (ot applicable because +*,3e(t o4 t)e +re3'53 was '( 4*ct e#e(t5*66, 3*-e in this case. 5otably, the premium invoice issued to !inca at the time of the delivery of the policy was stamped 6!ayment 7eceived6 of the amount of !'+$./$ by ,omingo -dora. This is important because it suggests an understanding between MICO and the insured that such payment could be made later, as agent -dora had assured !inca. In any event, it is not denied that this payment was actually made by !inca to -dora, who remitted the same to MICO.

It is not disputed that the preium was actually paid by !inca to -dora who received it on behalf of MICO, to which it was remitted. 4hat is 1uestioned is the validity of !inca.s payment and of -dora.s authority to receive it. MICO.s ac8nowledgment of -dora as its agent defeats its contention that he was not authori9ed to receive the premium payment on its behalf. It is clearly provided in 3ection +$/ of the Insurance Code that: SEC. 306. xxx xxx xxx Any insurance company which delivers to an insurance aent or insurance broker a policy or contract of insurance shall be deemed to have authori ed such a!ent or broker to receive on its behalf payment of any premium which is due on such policy or contract of insurance at the time of its issuance or delivery or which becomes due thereon. -nd it is a well*8nown principle under the law of agency that: !ayment to an agent having authority to receive or collect payment is e1uivalent to payment to the principal himself; such payment is complete when the money delivered is into the agent.s hands and is a discharge of the indebtedness owing to the principal. 4e do not share MICO.s view that there was no e<isting insurance at the time of the loss sustained by !inca because her policy never became effective for non*payment of premium. !ayment was in fact made, rendering the policy operative and removing it from the provisions of -rticle ==.