3. CIR vs The Philippine American Accident Insurance Company, Inc., The Philippine American Assurance Company, Inc.

, and
The Philippine American General Insurance Co., Inc.

Facts: Respondents are domestic corporations licensed to transact insurance business in the country. Respondents paid the BIR the
under protest the 3% tax based on the companys interest income from mortgage and other loans imposed on lending investors by CA
466 or the NIRC applicable at the time which is in addition to the taxes required of insurance companies under CA 466.

Respondents seek a refund of the taxes paid under protest from the petitioner but did not receive a response. In this regard, each
respondent filed a petition for review with the CTA which were later consolidated. Respondents argued that they are not lending investors
and as such were not subject to the 3% lending investors tax under Section 195-A.

On the other hand, petitioner does not dispute that respondents are in the insurance business. However, petitioner alleges that the
definition of lending investors under CA 466 is broad enough to encompass insurance companies. Petitioner insists that lending investor
include all persons who make a practice of lending money for themselves or others at interest. Hence, the two principal activities of the
insurance business, namely, underwriting and investment, are separately taxable.

Issue: Whether or not the respondent insurance companies are included in the term lending investors?

Ruling: No. The insurance companies and lending investors are different enterprises in the eyes of the law.

Lending investors cannot, for a consideration, hold anyone harmless from loss, damage or liability, nor provide compensation or
indemnity for loss. The underwriting of risks is the prerogative of insurers, the great majority of which are incorporated insurance
companies like respondents.

In particular, the Insurance Code of 1978 provides that an insurer or insurance company "shall include all individuals, partnerships,
associations or corporations engaged as principals in the insurance business, excepting mutual benefit associations.

In this case, respondents specifically fall under the category of insurance corporations which are corporations formed or organized to
save any person or persons or other corporations harmless from loss, damage, or liability arising from any unknown or future or
contingent event, or to indemnify or to compensate any person or persons or other corporations for any such loss, damage, or liability, or
to guarantee the performance of or compliance with contractual obligations or the payment of debts of others.

9. UCPB General Insurance Co., Inc. vs. Masagana Telamart, Inc., 356 SCRA 307, G.R. No. 137172 April 4, 2001

Facts: Plaintiff obtained from defendant fire insurance policies on its property effective from 4pm of 22 May 1991 to 4pm of 22 May 1992.
On June 13, 1992, plaintiff's properties were razed by fire. On 13 July 1992, plaintiff tendered, and defendant accepted five managers
checks as renewal premium payments for which a receipt was issued. The following day, Masagana made a claim which was denied. the
checks were then returned to plaintiff. According to defendant, the claim cannot be entertained because the policies covering the burned
properties already expired and not renewed for another term and the properties were burned before the tender of premium.
On the other hand, the plaintiff argued that despite petitioners awareness of Section 77, it persuaded and induced respondent to believe
that payment of premium on the 60- to 90-day credit term was perfectly alright. Hence, by extending credit and habitually accepting
payments 60 to 90 days from the effective dates of the policies, it has implicitly agreed to modify the tenor of the insurance policy and in
effect waived the provision therein that it would pay only for the loss or damage in case the same occurred after payment of the premium.

Issue: Whether or not the respondent is estopped from invoking Section 77 of the Insurance Code by granting credit terms for the
payment of its premium?

Ruling: Yes. It would be unjust and inequitable if recovery on the policy would not be permitted against Petitioner, which had consistently
granted a 60- to 90-day credit term for the payment of premiums despite its full awareness of Section 77. Estoppel bars it from taking
refuge under said Section, since Respondent relied in good faith on such practice. Estoppel then is an exception to Section 77.

In summary. the Court enumerated the exceptions to Section 77. To wit:

1. In case of a life or industrial life policy whenever the grace period provision applies (Section 77);
2. The second is that covered by Section 78 of the Insurance Code, which provides: any acknowledgment in a policy or contract
of insurance of the receipt of premium is conclusive evidence of its payment, so far as to make the policy binding,
notwithstanding any stipulation therein that it shall not be binding until premium is actually paid;
3. If the parties have agreed to the payment in installments of the premium and partial payment has been made at the time of loss
(Makati Tuscany Condominium Corporation vs. Court of Appeals);
4. The grant of credit extension by the insurer for the payment of the premium.
5. Estoppel (UCPB General Insurance Co, Inc. vs Masagana Telamart)

The Court added that there is nothing in Section 77 which prohibits the parties in an insurance contract to provide a credit term within
which to pay the premiums. That agreement is not against the law, morals, good customs, public order or public policy.