PHILIPPINE PHOENIX SURETY & INSURANCE, INC., PLAINTIFF-APPELLEE, VS. WOODWORKS, INC., DEFENDANT-APPELLANT.

Appeal upon a question of law taken by Woodworks, Inc. from the judgment
of the Court of First Instance of Manila in Civil Case No. 50710 “ordering
the defendant, Woodworks, Inc. to pay to the plaintiff, Philippine Phoenix
Surety & Insurance, Inc., the sum of P3,522.09
with interest thereon at the legal rate of 6% per annum from the date of the
filing of the complaint until fully paid, and costs of the suit”.

Appellee Philippine Phoenix Surety
& Insurance Co., Inc., commenced this action in the Municipal Court of
Manila to recover from appellant Woodworks, Inc. the sum of P3,522.09, representing the unpaid balance of the pre­miums on
a fire insurance policy issued by appellee in favor
of appellant for a term of one year from April
1, 1960 to April 1, 1961.  From an adverse decision of said court,
Woodworks, Inc. appealed to the Court of First Instance of Manila (Civil Case
No. 50710) where the parties submitted the following stipulation of facts, on
the basis of which the appealed decision was rendered:

“That plaintiff and defendant are both corporations duly
organized and existing under and by virtue of the laws of the Philippines;

“That on April 1, 1960, plaintiff issued to defendant Fire
Policy No. 9652 for the amount of P300,000.00, under the terms and conditions
therein set forth in said policy a copy of which is hereto attached and made a
part hereof as Annex ‘A’;

“That the premiums of said policy as stated in Annex ‘A’
amounted to P6,051.95; the margin fee pursuant to the adopted plan as an
implementation of Republic Act 2609 amounted to P363.72, copy of said adopted plan
is hereto attached as Annex ‘B’ and made a part hereof, the documentary stamps
attached to the policy was P96.42;

“That the defendant paid P3,000.00 on
September 22, 1960 under
official receipt No. 30245 of plaintiff;

“That plaintiff made several demands on defendant to pay the
amount of P3,522.09.”

In the present appeal, appellant claims that the court a quo
committed the following errors:

“I. The lower court erred in stating that in fire insurance
policies the risk attached upon the issuance and delivery of the policy to the
insured.

“II. The lower court erred in de­ciding that in a perfected
contract of insurance non-payment of premium does not cancel the policy.

“III. The lower court erred in de­ciding that the premium in the
policy was still collectible when the complaint was filed.

“IV. The lower court erred in deciding that a partial payment
of the premium made the policy effective during the whole period of the
policy.”

It is clear from the foregoing that on April 1, 1960 Fire Insurance Policy No. 9652 was
issued by appellee and delivered to appellant, and
that on September 22 of the same year, the latter paid to the former the sum of
P3,000.00 on account of the total premium of P6,051.95
due thereon.  There is, consequently, no
doubt at all that, as between the insurer and the insured, there was not only a
perfected contract of insurance but a partially performed one as far as the
payment of the agreed premium was concerned. 
Thereafter the obligation of the insurer to pay the insured the amount for
which the policy was issued in case the conditions therefor
had been complied with, arose and became binding upon it, while the obli­gation
of the insured to pay the remainder of the total amount of the premium due
became demandable.

We can not agree with appellant’s theory that non­payment by it
of the premium due, produced the cancellation of the
contract of insurance.  Such theory would
place exclusively in the hands of one of the contracting parties the right to
decide whether the contract should stand or not.  Rather the correct view would seem to be
this:  as the contract had become
perfected, the parties could demand from each other the performance of whatever
obligations they had assumed.  In the
case of the insurer, it is obvious that it had the right to demand from the
insured the com­pletion of the payment of the premium due or sue for the
rescission of the contract.  As it chose
to demand specific performance of the insured’s obligation to pay the balance
of the premium, the latter’s duty to pay is indeed indubi­table.

Having thus resolved that the fourth and last assign­ment of
error submitted in appellant’s brief is without merit, the first three
assignments of error must likewise be overruled as lacking in merit.

WHEREFORE, the appealed decision being in accordance with
law and the evidence, the same is hereby affirmed, with costs.

Concepcion, C.J., Reyes, Makalintal, Bengzon, Zaldivar, Sanchez, Castro, Angeles, and Fernando, JJ., concur.