Rabe, Cheryl Grace M.

2C

Insurance (Group 3)

G.R. No. L-31845 April 30, 1979 (Title VI-E No. 30) GREAT PACIFIC LIFE ASSURANCE COMPANY v. HONORABLE COURT OF APPEALS DE CASTRO, J. Facts: Ngo Hing, Private Respondent, filed an application for a 20-year endowment policy with Petitioner on the life of his 1-yr. old daughter. Ngo Hing paid the annual premium and a binding deposit receipt was issued to him. Mondragon received a letter from petitioner disapproving the insurance application, stating that the 20-year endowment plan is not available for minors below seven years old and offers to issue a policy for a different plan. The non-acceptance of the insurance plan was allegedly not communicated by Mondragon to Ngo Hing. The daughter of Ngo Hing died of influenza and thereupon, he sought the payment of the proceeds of the insurance, but failed. Issue: Whether the binding deposit receipt constitutes a temporary contract of insurance? Held: No, the binding deposit receipt issued contained provisions showing that it is intended to be a provisional or temporary insurance contract AND only upon compliance of the conditions precedent contained therein. The binding deposit receipt in question is merely an acknowledgment that the branch office received from the applicant the insurance premium and accepted the application subject for processing by the insurance company which will either approve or reject on the basis of whether or not the applicant is "insurable on standard rates." Since petitioner disapproved the insurance application of Ngo Hing, the binding deposit receipt in question had never become in force at any time. It is merely conditional and does not insure outright. Where an agreement is made between the applicant and the agent, no liability shall attach until the principal approves the risk and a receipt is given by the agent. The acceptance is merely conditional and is subordinated to the act of the company in approving or rejecting the application. Thus, in life insurance, a "binding slip" or "binding receipt" does not insure by itself. (G.R. No. 110597 May 8, 1996 (Title VI-J No. 38) SERVICEWIDE SPECIALIST, INC. v. COURT OF APPEALS, RICARDO & ELISATRINIDAD ROMERO, J. Facts: Private respondents purchased a Isuzu Gemini car from Autoworld Sales Corp., the price payable in 24 equal monthly instalments. To secure payment, respondents executed a promissory note and a deed of chattel mortgage in favor of Autoworld Sales Corp., which assigned its interests on the said note and chattel mortgage to Filinvest Credit Corp., with notice to respondents. Respondents delivered seventeen (17) checks to Filinvest in full payment of the car and proper receipts were issued by Filinvest and all documents regarding ownership of the car were released to respondents. Filinvest then assigned all its rights and interests on the note and chattel mortgage in favor of petitioner. Ricardo Trinidad received a demand letter from petitioner stating that an assignment of credit had been made by Filinvest in its favor and that the Trinidads had not paid two successive installments on the car. No mention was made in the letter that Filinvest had paid insurance premiums to insure the car against loss and damage. Respondents were also never informed by Filinvest that their installment payments on the car were converted to premium payments on the insurance. The provision in the Chattel Mortgage subject of the controversy states: The said MORTGAGOR covenants and agrees that he will cause the property/ies to be insured against loss or damage ... and forewith deliver such policy or policies to the MORTGAGEE, the said MORTGAGOR further covenants and agrees that default of his effecting or renewing such insurance and delivering the policies so endorsed to the MORTGAGEE within five (5) days after the execution of this mortgage or the expiry date of the insurance, the MORTGAGEE, may, at his option, but without any obligation to do so effect such insurance or obtain such renewal for the account of the MORTGAGOR and that any money so disbursed by the MORTGAGEE shall be added to the principal indebtedness hereby secured and shall become due and payable at the time for the payment of the immediately coming or following installment to be due ... Issue: : Whether or not petitioner should have applied the installment payments made by private respondents for the payment of the car to the payment of the insurance premiums without prior notice to private respondents. Held: No, the Chattel Mortgage does not authorizes petitioner to apply previous payments for the car to the insurance. What is stated is: ". . . that any money so disbursed by the mortgagee shall be added to the principal indebtedness hereby secured . . . . Petitioner is not obligated to convert any of the installments made by private respondents for the car to the payment for the renewal of the insurance. Should it decide to do so, it has to send notice to private respondents who had already paid in full the principal indebtedness in question. Furthermore, the Court notes that the petitioner as mortgagee was not dutybound to renew the insurance in the event that private respondents failed to do so; it was merely optional on its part.