44. G.R. No. 119655. May 24, 1996 SPS. ANTONIO A. TIBAY and VIOLETA R.

TIBAY and OFELIA M. RORALDO, VI TORINA M. RORALDO, VIRGILIO M. RORALDO, MYRNA M. RORALDO and ROSABELLA M. RORALDO !". O#RT OF APPEALS and FORT#NE LIFE AND GENERAL INS#RAN E O., IN . FA TS$ Private respondent Fortune Life and General Insurance Co., Inc. (FORTUNE issued fire insurance polic! in favor of "ioleta R. Ti#a! and$or Nicolas Roraldo on t%eir t&o'store! residential #uildin( in )a*ati Cit!, to(et%er &it% all t%eir personal effects t%erein. Of t%e total pre+iu+ of P,,-./.01, petitioner "ioleta Ti#a! onl! paid P211.11 t%us leavin( a considera#le #alance unpaid. T%e insured #uildin( &as co+pletel! destro!ed #! fire. T&o da!s later, "ioleta Ti#a! paid t%e #alance of t%e pre+iu+. On t%e sa+e da!, s%e filed &it% FORTUNE a clai+ on t%e fire insurance polic!. FORTUNE denied t%e clai+ of "ioleta for violation of Polic! Condition No. , and of 3ec. 44 of t%e Insurance Code. T%e %&'a( )o*&% ruled for petitioners and ad5ud(ed FORTUNE lia#le for t%e total value of t%e insured #uildin( and personal properties. T%e o*&% o+ A,,-a(" reversed t%e court a quo #! declarin( FORTUNE not to #e lia#le to plaintiff'appellees t%erein #ut orderin( defendant'appellant to return to t%e for+er t%e pre+iu+ of P,,-./.01 plus 6,7 interest until full pa!+ent. ISS#E$ 8%et%er a fire insurance polic! is valid, #indin( and enforcea#le upon .-&- ,a&%'a( ,ay.-n% of pre+iu+. /ELD$ NO. 8e affir+ t%e Court of 9ppeals. T%e consideration is t%e pre+iu+, &%ic% +ust #e paid at t%e ti+e and in t%e &a! and +anner specified in t%e polic!, and if not so paid, t%e polic! &ill lapse and #e forfeited #! its o&n ter+s. T%e pertinent provisions in t%e Polic! on pre+iu+ read : T;I3 POLIC< OF IN3UR9NCE 8ITNE33ET;, T;9T only after payment to the Company in accordance with Policy Condition No. 2 of the total premiums by the insured as stipulated a#ove for t%e period afore+entioned for insurin( a(ainst Loss or =a+a(e #! Fire or Li(%tnin( as %erein appears, t%e Propert! %erein descri#ed > > > ,. T%is polic! includin( an! rene&al t%ereof and$or an! endorse+ent t%ereon is not in force until t%e pre+iu+ %as #een +*((y ,a'd to and dul! receipted #! t%e Co+pan! in t%e +anner provided %erein. 9n! supple+entar! a(ree+ent see*in( to a+end t%is condition prepared #! a(ent, #ro*er or Co+pan! official, shall be deemed invalid and of no effect. Clearl! t%e Polic! provides for pa!+ent of pre+iu+ 'n +*((. 9ccordin(l!, &%ere t%e pre+iu+ %as onl! #een partiall! paid and t%e #alance paid onl! after t%e peril insured a(ainst

%as occurred, t%e insurance contract did not ta*e effect and t%e insured cannot collect at all on t%e polic!. T%is is full! supported #! 3ec. 44 of t%e Insurance Code. Confor+a#l! &it% t%e aforesaid stipulations e>plicitl! &orded and ta*en in con5unction &it% 3ec. 44 of t%e Insurance Code t%e pa!+ent of partial pre+iu+ #! t%e assured in t%is particular instance s%ould not #e considered t%e pa!+ent re?uired #! t%e la& and t%e stipulation of t%e parties. Rat%er, it +ust #e ta*en in t%e concept of a deposit to #e %eld in trust #! t%e insurer until suc% ti+e t%at t%e full a+ount %as #een tendered and dul! receipted for. In ot%er &ords, as e>pressl! a(reed upon in t%e contract, full pa!+ent +ust #e +ade #efore t%e ris* occurs for t%e polic! to #e considered effective and in force. If t%e pre+iu+ is not paid in t%e +anner prescri#ed in t%e polic! as intended #! t%e parties t%e polic! is ineffective. Partial pa!+ent even &%en accepted as a partial pa!+ent &ill not *eep t%e polic! alive even for suc% fractional part of t%e !ear as t%e part pa!+ent #ears to t%e &%ole pa!+ent.