CASES OF INSURANCE

1. On Dec. 17, 1995, a fire policy, insuring a building and its contents, was delivered to the insured company.By agreement, it was allowed to pay the premium within 30 days.On January 8, 1996, it paid the premium by means of a check postdated, January 16, 1996.The check was deposited by the insurance company only on Feb. 20, but the check bounced, although on January 19, the insured hada sufficient bank balance.On January 18, two (2) days after the premium became due, the insured property was burned and became a total loss.

Question:Can the insurance company cancel the policy for non-payment of premium?Give reasons for your answers. (10 pts)

2. "X"insured his house against loss for P1.0MM.The policy provides that the insurer shall be liable "if the property insured shall be damaged or destroyed by fire after the payment of premium, at anytime, from June 15, 2006 to June 14, 2007".The policy was delivered to"X"on June 14, 2006.Instead of payingthe premium in cash."X"issued a promissory note dated June 15, 2006, for the amount of the premium payable within 30 days.The note was accepted. On June 29, 2006, the property insured was burned.The insurer refused to pay on the ground that the premium had not been paid, and the note did not have the effect of payment as its value had not been realized at the time the house was burned.

Decide with reasons.