GR L 4197; (March, 1952) (Digest)
G.R. No. L-4197 March 20, 1952
FIDELA SALES DE GONZAGA, plaintiff-appellant, vs. THE CROWN LIFE INSURANCE COMPANY, defendant-appellee.
FACTS
On September 26, 1939, The Crown Life Insurance Company, with its home office in Toronto, Canada, issued a 20-year endowment policy for P15,000 to Ramon Gonzaga through its Manila branch. The insured paid the yearly premium of P591.00 for three consecutive years, with the last payment made on September 6, 1941. Due to the outbreak of war, no further premiums were paid. The policy remained in force until June 12, 1943, under its automatic premium loan clause. Ramon Gonzaga died from an accident on June 27, 1945. His widow, the named beneficiary, filed suit on December 18, 1947, to collect the policy amount. The defendant insurance company defended on the ground that the policy had lapsed due to non-payment of premiums. The trial court ruled in favor of the defendant.
ISSUE
Whether the non-payment of premiums during the war, and the alleged failure of the insurer to notify the insured of a change in its office address, excused the delinquency and prevented the lapse of the insurance policy.
RULING
The Supreme Court affirmed the trial court’s decision, ruling against the plaintiff-appellant. The Court held that non-payment of premiums due to war puts an end to the insurance contract, as time is of the essence in such contracts and courts cannot relieve parties from their own negligence. Regarding the notice of change of address, the Court found that the defendant, being an enemy corporation, was ordered closed by Japanese Military authorities in January 1942 and was expressly prohibited from doing business by August 1942. Although its general agent maintained a clandestine office with Filipino employees to receive premiums, the insurer was under no legal duty, and was in fact prohibited, from sending out notices to policyholders during the occupation. The opening of an interim office was a privilege extended to policyholders, not a contractual duty. Furthermore, the insured could have contacted the insurer’s known agents or employees, and had the opportunity to apply for reinstatement within three years from the lapse (June 12, 1943) before his death on June 27, 1945, as the defendant’s Manila branch had resumed regular business on May 1, 1945, in a building the insured visited regularly. The policy had therefore validly lapsed.