Section 859.- In the absence of anything appearing to the contrary, either party may at any time terminate the contract of current account and have the balance struck.

 

Section 860.- The difference, if not paid, bears interest from the day when the balance was struck.

 

TITLE XX

INSURANCE

CHAPTER I

GENERAL PROVISIONS

 

Section 861.- A contract of insurance is one in which a person agrees to make compensation or to pay a sum of money in case of contingent loss or any other future event specified in the contract, and another person agrees to pay therefore a sum of money, called premium.

 

Section 862.- In the present Title :

                “Insurer” means the party who agrees to make compensation or to pay a sum of money.

                “Assured” means the party who agrees to pay the premium.

                “Beneficiary” means the person who is to receive compensation or to be paid a sum of money.

The assured and the beneficiary may be one and the same person.

 

Section 863.- A contract of insurance is not binding on the parties unless the assured has an interest in the event insured against.

 

Section 864.- When the parties to a contract of insurance, in fixing the amount of the premium, took into consideration a particular risk, and such risk ceases to exist, the assured is entitled to have the premium reduced proportionately for the future.

 

Section 865.- If at any time of making the contract, the assured, or, in the case of insurance on life, the person upon whose life or death the payment of the sum payable depends, knowingly omits to disclose facts which would have induced the insurer to raise the premium or to refuse to enter into the contract, or knowingly makes false statements in regard to such facts, the contract is violable.

If such right of avoidance is not exercised within one month from the time when the insurer has knowledge of the ground of avoidance, or within five years from the date of the contract, such right is extinguished.

 

Section 866.- If the insurer knew of the facts mentioned in Section 865, or knew the statements to be false, or would have known of them or of their falsity if he had exercised such care as may be expected from a person or ordinary prudence, the contract shall be valid.