Gonzalez Lao v. Yek Tong Lin Fire & Marine Insurance - Insurance Premiums

55 PHIL 386

Facts:

>  Gonzales was issued 2 fire insurance policies by Yek for 100T covering his leaf tobacco prducts.

>  They were stored in Gonzales’ building on Soler St., which on Jan. 11, 1928, burned down.

>  Art. 3 of the Insurance policies provided that: “Any insurance in force upon all or part of the things unsured must be declared in writing by the insured and he (insured) should cause the company to insert or mention it in the policy. Without such requisite, such policy will be regarded as null and void and the insured will be deprived of all rights of indemnity in case of loss.”

>  Notwithstanding said provision, Gonzales entered into other insurance contracts.  When he sought to claim from Yek after the fire, the latter denied any liability on the ground of violation of Art. 3 of the said policies.

>  Gonzales however proved that the insurer knew of the other insurance policies obtained by him long efore the fire, and the insurer did NOT rescind the insurance polices in question but demanded and collected from the insured the premiums.

Issue:

Whether or not Yek is still entitled to annul the contract.

Held:

NO.

The action by the insurance company of taking the premiums of the insured notwithstanding knowledge of violations of the provisions of the policies amounted to waiver of the right to annul the contract of insurance.