FIDELA SALES DE GONZAGA, Plaintiff, vs. THE CROWN LIFE INSURANCE COMPANY

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PHILIPPINE REPORTS ANNOTATED VOLUME 091
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[No. L-4197. March 20, 1952]
FIDELA SALES DE GONZAGA, plaintiff

and appellant, vs. THE CROWN LIFE
INSURANCE COMPANY, defendant and
appellee.
11
VOL. 91, MARCH 20, 1952 11

Sales de Gonzaga vs. Crown Life
Insurance Co.
1. INSURANCE; WAR; NON-PAYMENT OF

PREMIUMS BY REASON OF WAR.
·Non-payment of premiums by reason of
war puts an end to the contract of
insurance. Time is material and of the
essence of the contract, Non-payment at
the day involves absolute forfeiture if such
be the terms of the contract. Courts
cannot with safety vary the stipulation of
the parties by introducing equities for the
relief of the insured against their own
negligence.
2. ID.; ID.; FAILURE TO ADVISE THE

INSURED OF THE INSURANCE
COMPANY'S NEW ADDRESS.·Where
the offices of the defendant insurance
company, being an enemy corporation,
were ordered closed by the Japanese
Military authorities, but the company
opened an office clandestinely for the
purpose of receiving premiums from policy
holders, the failure of the defendant to
advice the insured of the defendant's new
address did not work as a forfeiture of its
right to have the premiums satisfied
promptly.
3. STATUTE; OBLIGATIONS; No DUTY

WHERE LAW FORBIDS.·There is no
duty where the law forbids; and there is
no obligation without a corresponding
right enjoyed by another.
APPEAL from a judgment of the Court of

First Instance of Cavite. Bernabe, J.
The facts are stated in the opinion of the
Court.
Beltran S. Anuat for appellant.
Nicodemus L. Dasig for appellee.
TUASON, J.:
This is one more case wherein the question

of the effects of war on a pre-war
insurance contracts is presented.
Reduced to their absolute essentials, the
facts are that, on September 26,1939, the
Crown Life Insurance Co., whose home
office is in Toronto, Canada, issued to
Ramon Gonzaga through its branch office
in Manila a 20-year endowment policy for
P15,000. The insured paid in due time the
agreed yearly premium, which was
P591.00, for three consecutive years, the
last payment having been effected on
September 6, 1941. On account of the
outbreak of war, no premiums were paid
after that date, although the policy was
continued in force up to June 12, 1943,
under its automatic premium loan clause.
12
12 PHILIPPINE REPORTS
ANNOTATED
Insurance Co.
Ramon Gonzaga died on June 27, 1945
from an accident. Unsuccessful in her
attempt to collect the amount of the policy,
his widow and the beneficiary named in the
policy began this suit on December 18,
1947. The defendant set up the defense that
the policy had lapsed by non-payment of
the stipulated premiums on the stipulated
dates. And the trial court in a caref ully
written decision ruled against the plaintiff.
Since this action was decided by the
court below, several cases analogous to this
one in, its main characteristics have come
up before this Court. (Paz Lopez de
Constantino vs. Asia Life Insurance
1
Company, G. R. No. L-1669; Agustina2
Peralta vs. Asia Life Insurance Company,
G. R. No. L-1670; James McGuire vs. 3
The
Manufacturers Life Insurance Co., G. R.
No. L-3581; National Leather Co., Inc. 4 vs.
The United States Life Insurance Co., G.
R. No. L-2668; Victoria Hidalgo Vda. de
Carrero, et al,, vs. The Manufacturers Life
5
Insurance Co., G. R, No. L-3032; and
West Coast Life Insurance Co. vs. Patricio
6
H. Gubagaras, G. R. No. L-2810.) In Paz
Lopez de Constantino vs. Asia Life
Insurance Company, G. R. No'. L-1669,
the leading case, the Court, speaking
through Mr. Justice Bengzon, adopted this
doctrine:
"The case, therefore, is one in which time is

material and of the essence of the contract. Non-
payment at the day involves absolute forfeiture if
such be the terms of the contract, as is the case
here. Courts cannot with safety vary the
stipulation of the parties by introducing equities
for the relief of the insured against their own
negligence."
The aforecited decisions are decisive of the

proposition that non-payment of premiums
by reason of war puts an end to the
contract.
There is, however, one aspect of the case
at bar not raised before and upon which the
plaintiff rests her case in the alternative.
In its answer, the defendant alleged that
"through its General Agents, Hanson, Orth
S. Stevenson, Inc., it had its
_______________
1 47 Off. Gaz. Supp. 12, p. 428

2 87 Phil. 248
3 87 Phil. 370
4 87 Phil. 410; 48 Off. Gaz. 142
5 87 Phil. 460
6 Oct. 10, 1950
13
VOL. 91, MARCH 20, 1952 13

Insurance Co.
offices open in the City of Manila during

the Japanese occupation of the
Philippines." Taking advantage of this
allegation, and ignoring her own in her
complaint-that "for the whole duration of
the (war) and from thence to some time
thereafter, that is, in October, 1945, * * *
defendant closed its business in the Islands,
and had absolutely no agency or
representative here to represent it, with
authority to collect premiums from the
Insured," the plaintiff asserts that it was
the defendant's duty to notify her husband
of its postal address during the war, and
that its f failure to do so excused
delinquency in the payment of the
premiums. The plaintiff cites the provision
of the contract which states that "all
premiums subsequent to the first year are
payable to the Company's authorized
cashier at the place stated in the fourth
page hereof, or at such other place instead
thereof as may be designated from time to
time by notice from the Company mailed to
the Insured at his last known post office
address."
The evidence on this feature of the case
reveals that, the defendant being an enemy
corporation, its offices, which were housed
at the Chaco Building when the hostilities
broke out, were ordered closed by the
Japanese Military authorities in January
1942, and the officers of Hanson, Orth &
Stevenson, Inc., defendant's general agents,
being American citizens, were interned. In
addition, on August 25 the Japanese
administration issued "Instruction No. 71"
by which enemy alien insurance
companies were expressly prohibited from
doing business.
But before that instruction was
promulgated Hanson, Orth & Stevenson
had opened in the house of one of their
Filipino employees on Gonzales Street in
Ermita an office with a skeleton force, all
Filipinos, for the purpose of receiving
premiums from their policy holders; and
notwithstanding the prohibition, that office
was not closed.
In the face of the Japanese Military
decrees, which found sanctions in
international law, the failure of the
defendant or its Filipino employees to
advise the insured of the defendant's new
address did not work as a forfeiture of its
14
14 PHILIPPINE REPORTS
ANNOTATED
Insurance Co.
right to have the premiums satisfied

promptly. While clandestine transactions
between the parties during the war might
be binding, it was not obligatory on the
insurer, and it was well-nigh risky for its
employees, to send out notices to its widely
scattered policy holders, what with the
postal service under the control and
administration of the ruthless occupants.
There is no duty where the law forbids;
and there is no obligation without
corresponding right enjoyed by another.
The insured had no right to demand that
the defendant maintain an office during the
war, and the defendant was not obligated to
do so. Had the def endant not opened any
office at all during the occupation and
stopped receiving premiums absolutely, the
plaintiff 's position would not have been any
better or worse for the closing and
suspension of the defendant's business. Had
the plaintiff's husband actually tendered
his premiums and the def endant's
employees rejected them, he could not have
insisted on the payment as a matter of
right. Stated otherwise, the defendant's
opening of an interim office partook of the
nature of a privilege to the policy holders to
keep their policies operative rather than a
duty to them under the contract.
Of this privilege, incidentally, Gonzaga
could have taken advantage if he was really
intent on preserving his policy.
Uncontroverted or admitted is the f act that
the def endant's agent, through whom he
had been insured, lived in Malabon, Rizal,
and was his close acquaintance; and so
were some of the defendant's Filipino
employees who handled the insurance
business of Hanson, Orth S. Stevenson
during the occupation. And Gonzaga
admittedly come to Manila on a visit every
now and then, and could have, without
difficulty, contacted any of those people.
For another thing, the policy carried a
clause providing for its reinstatement
under certain conditions within three years
from the date of lapse on application of the
insured. The present policy lapsed on June
12, 1943, the Company's Manila branch
was reopened on May 1, 1945 and resumed
15
VOL. 91, MARCH 20, 1952 15

Standard-Vacuum Oil Co. vs. Phil. Labor
Organizations
regular business through the same general

agents at the Wilson Building on Juan
Luna Street, Manila, and Ramon Gonzaga
died on June 27, 1945. It is undoubted that
Gonzaga knew all that. It is not denied
that he was an employee in the United
States Navy, that the United States Navy
had an office in the same Wilson Building,
and that he came at least twice a month to
that office for his salary.
Both in law and in reason, the action
was properly dismissed and the appealed
decision is hereby affirmed, with costs.
Parás, C. J., Pablo, Bengzon,

Montemayor, Reyes, Jugo and Bautista
Angelo, JJ., concur.
Judgment affirmed.
_______________
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PHILIPPINE REPORTS ANNOTATED VOLUME 091

[No. L-4197. March 20, 1952]

FIDELA SALES DE GONZAGA, plaintiff

VOL. 91, MARCH 20, 1952 11

1. INSURANCE; WAR; NON-PAYMENT OF

2. ID.; ID.; FAILURE TO ADVISE THE

3. STATUTE; OBLIGATIONS; No DUTY

APPEAL from a judgment of the Court of

This is one more case wherein the question

"The case, therefore, is one in which time is

The aforecited decisions are decisive of the

1 47 Off. Gaz. Supp. 12, p. 428

VOL. 91, MARCH 20, 1952 13

offices open in the City of Manila during

right to have the premiums satisfied

VOL. 91, MARCH 20, 1952 15

regular business through the same general

Parás, C. J., Pablo, Bengzon,

© Copyright 2010 CentralBooks Inc. All rights reserved.

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