Case No.

49
Paulin v. Insular Life Assurance. Co. Ltd.
47 OG 3012 [1949]

TOPIC: PREMIUM PAYMENTS

Facts: This action was instituted by the minors Vicentita Antigua Paulin and Silvina Paulin, who are sisters assisted
by their guardian ad-litem, for the purpose of collecting the amount of three life insurance policies issued by the
defendant, the Insular Life Assurance Co. ltd. In favor of their father, Estaban Paulin, who is alleged to have been
killed by the guerillas, on or about December 10, 1943.

The aforementioned policies are Policy no. 84029 in the sum of P 2,000, issued on August 1, 1940, with premiums
payable on the first day of August of each year, for 20 years and the second Policy No. 84683, in the sum of P 2,
000, issued on October 1, 1940, with premiums payable on the first day of October of each year, for 20 years and
Policy No. 85061, in the sum of P7, 000 issued on October 1, 1940, with premiums payable on the first day of every
month, for 20 years. The three policies carried an accidental death benefit clause, providing for double indemnity
in case of death, under the conditions therein set forth, and named the plaintiffs as beneficiaries in such case.

Upon demand, made on behalf of the plaintiffs, the defendant refused to pay the sums stated in said policies, on
the ground that the same had lapsed, prior to the date of death of Esteban Paulin, for non-payment of premiums.
Hence complaint herein, which, after due trial, was dismissed by the RTC.

Appellee admits having received, in connection with policy no 84029, the annual premiums due on August 1, 1940
and August 1, 1941; in connection with policy no. 84683, the annual premiums due on October 1, 1940, and
October 1, 1941; and in connection with policy no. 85061, fifteen monthly premiums which fell due from October
1, 9140 to December 1, 1941, inclusive.

ISSUE: Whether or not the policies have lapsed for the non-payment of premium.

HELD: YES. Despite appellants assertion to the contrary, no evidence whatsoever of such payment, in relation to
the policies nos. 84029 and 84683, has been introduced. Despite appellants testimonial and documentary
evidence, they do not bear any contention.

Exhibit B only showed a provisional receipt for the initial premium paid on October 11, 1940 and the acceptance
letter by Esteban Paulin were only submitted in connection with Policy No. 84683.

Exhibit c, with reference to Policy no. 85061, were letters written by Esteban Paulin to the defendant on the first
day of May, July and November 1942 and March, April, June and July 1943, respectively, each stating that it
enclosed a post office money order for P36.12, which, presumably represented the monthly premiums falling due
in the months already mentioned. But these were not part of the records of the defendant company but found
among the personal belongings of the deceased Esteban Paulin. Each of the letters in the exhibit bore the
signature of Esteban which the Court finds them to be originals. Having remained in the possession of its writer, it
tends to show that the premiums for the months specified were not forwarded to the defendant.

It is urged also that, in view of the Executive Order No. 25, series of 1944, as amended by Executive Order No. 32,
series of 1945, providing for a moratorium in the enforcement of payment of all debts or monetary obligations
contracted prior to the liberalization of the Philippines by the American forces, the policies could not and did not
lapse for non-payment of the premiums. This contention is untenable, for an insured is not under the obligation to
pay premiums. The same do not constitute a debt and the insurance company cannot compel payment thereof,
which is one only of the conditions for the subsistence or effectively of an insurance policy.
While the payment of premiums or assessments as specified in the insurance contract is necessary to bind the
insurer to discharge its obligations imposed by the contract, it is generally true in the case of life insurance
contracts that there is no absolute undertaking to pay the premiums or assessment and, consequently, no
personal liability of the insurer, and the insured, if he has not expressly promised to pay, is at liberty to refuse to
make the payment.