MALAYAN INSURANCE CO., INC. (MICO), vs.

GREGORIA CRUZ ARNALDO, in her capacity as

the INSURANCECOMMISSIONER, and CORONACION PINCAG.R. No. L-67835 October 12, 1987

FACTS:

Coronacion Pinca insured her property for Php 14,000 with Malayan Insurance
Company(MICO) for the period July 22, 1981 to July 22, 1982. On October 15,
1981, MICO cancelled the policy for non-payment. On December 24, 1981, Domingo Adora,
the agent accepted Pinca's paymentand remitted to MICO. On January 18, 1982, Pinca's
property was completely burned . She then demanded from MICO for payment of the
insured but the latter declined on the ground that the policyhad been cancelled due to non-
payment. Pinca went to the Insurance Commission, she was ultimatelysustained by the public
respondent, thus a petition was filed before the SC.

ISSUE:
Whether or not MICO should be held liable to pay for the insured property.

HELD:
MICO's acknowledgment of Adora as its agent defeats its contention that he was not authorized
toreceive the premium payment on its behalf. It is clearly provided in Section 306 of the
Insurance Codethat:SEC. 306. xxx xxx xxxAny insurance company which delivers to an
insurance agant or insurance broker a policy or contract of insurance shall be demmed to
have authorizedsuch agent or broker to receive on its behalf payment of any premium whichis
due on such policy or contract of insurance at the time of its issuance or delivery or
which becomes due thereon.And it is a well-known principle under the law of agency that:
Payment to an agent having authority to receive or collect payment is equivalent to
payment to the principal himself; such payment is complete when the money delivered is into
the agent's hands and isa discharge of the indebtedness owing to the principal. The SC denied the
petition and affirmed the decision of the Insurance Commission.