Palileo v Cosio, 97 Phil 919 (1955)
DOCTRINE: “Where a mortgagee, independently of the mortgagor, insures the mortgaged property in his own name and
for his own interest, he is entitled to the insurance proceeds in case of loss, but in such case, he is not allowed to retain
his claim against the mortgagor, but is passed by subrogation to the insurer to the extent of the money paid.”
FACTS: Palileo obtained from Cosio a loan in the sum of P12,000.
To secure the payment of the aforesaid loan, defendant required plaintiff to sign a document known as “Conditional Sale
of Residential Building”, purporting to convey to defendant, with right to repurchase, a two-story building of strong
materials belonging to plaintiff. This document did not express the true intention of the parties which was merely to place
said property as security for the payment of the loan.
After the execution of the aforesaid document, Cosio insured the building against fire for the sum of P15,000, the
insurance policy having been issued in her name. The building was partly destroyed by fire and, after proper demand,
Cosio collected from the insurance company an indemnity of P13,107.00.
Palileo demanded from Cosio that she be credited with the necessary amount to pay her obligation out of the insurance
proceeds but defendant refused to do so.(Bahay nya daw kasi talaga yun, kung hindi nasunog, wala rin matatanggap na
proceeds)
ISSUE: WON a mortgagor is entitled to the insurance proceeds of the mortgaged property independently insured by the
mortgagee?
What is the effect of the insurance?
HELD: NO. The rule is that “where a mortgagee, independently of the mortgagor, insures the mortgaged property in his
own name and for his own interest, he is entitled to the insurance proceeds in case of loss, but in such case, he is not
allowed to retain his claim against the mortgagor, but is passed by subrogation to the insurer to the extent of the money
paid.” (Vance on Insurance, 2d ed., p. 654)
stated in another way, “the mortgagee may insure his interest in the property independently of the mortgagor. In that
event, upon the destruction of the property the insurance money paid to the mortgagee will not inure to the benefit of the
mortgagor, and the amount due under the mortgage debt remains unchanged. The mortgagee, however, is not allowed to
retain his claim against the mortgagor, but it passes by subrogation to the insurer, to the extent of the insurance money
paid.”
---------------------------------------------------------------------------------------------------------------------------San Miguel Brewery v Law Union, 40 Phil 674 (1920) guys, sorry, pero nahirapan tlga ako intindihin tong case na
to :/ -Nikki
DOCTRINE:
FACTS: D.P. Dunn was an owner of a parcel of land mortgaged to San Miguel Brewery. Later on, Dunn assigned his
rights to Harding without the knowledge of San Miguel. For the period of the mortgage contract, San Miguel Brewery
requested Dunn to insure the property. With the assent of Dunn, San Miguel Brewery applied for two policies under Law
Union and Filipinas Compania de Seguros for 15,000 under the name of Dunn but with the notation that San Miguel
Brewery was applying for such policies as a mortgage creditor. San Miguel always paid the premiums on behalf of the
owner. San Miguel Brewery filed an action for recovery from the insurance companies when the property was destroyed
by a fire. Harding was included as a defendant but claimed that he was entitled to the mortgage credit and the face value
of the policies. The two insurance companies later settled with San Miguel and gave them the full value of their claim but
denied liability to Harding on the ground that under the contracts of insurance the liability of the insurance companies was
limited to the insurable interest of San Miguel. Hence, Harding appealed.
ISSUE: WON the insurance companies are liable to Harding
HELD: No. Harding is not a party to the contracts of insurance and cannot directly maintain the action. His claim is merely
of an equitable and subsidiary nature and must be made effective, if at all, through San Miguel in whose name the
contracts are written. Now, the Brewery, as mortgagee of the insured property, undoubtedly had an insurable interest
therein; but it could not, in any event, recover upon these policies an amount in excess of its face mortgage credit.
The measure of an insurable interest in property is the extent to which the insured might be damnified by loss or injury
thereof; while in the other it is stated that “the insurance shall be applied exclusively to the proper interest of the person in
whose name it is made unless otherwise specified in the policy.
---------------------------------------------------------------------------------------------------------------------------Gonzalez Lao v Yek Tong Lin Fire, GR 33131, 13 Dec 1930
G.R. No. L-33131
December 13, 1930
EMILIO GONZALES LAO, plaintiff-appellee,
vs.
THE YEK TONG LIN FIRE AND MARINE INSURANCE CO., LTD., defendant-appellant.
Pon: Villamor
DOCTRINE: Insured may be regarded as the real party in interest, although he has assigned as collateral security any
judgment he may obtain.
FACTS:
● GONZALEZ had his tobacco leaf products/supply insured under the fire insurance policies of respondent YEK
TONG.
● On January 11, 1928, these tobacco leaf products were damaged by the fire that destroyed the building on Soler
Street No. 188, where they were stored.
● So, expectedly, GONZALEZ wanted to claim the insurance.
● YEK TONG used various defenses in order to avoid paying GONZALEZ, one of which is that: the plaintiff cannot
recover under the policy as he has failed to prove that the Bank of the Philippine Islands, to whom the policy was
made payable, no longer has any rights and interests in it.
● IT APPEARS TO BE THAT GONZALEZ with the knowledge of YEK TONG had attached a note in the insurance
policies; notably, "There shall be paid to the Bank of the Philippine Islands an indemnity for any loss caused by
fire, according to the interest appearing in its favor."
ISSUE: Was there a defect in the parties that instituted the case? AKA should it be BPI that instituted the present claim for
insurance?
HELD: NO. Because there was no evidence that purported that the plaintiff ceded to the bank all his rights or interests in
the insurance; ONLY A NOTE (mentioned above as attached to the policies).
The Supreme Court noted that in…
Corpus Juris, volume 26, pages 483 et seq., states:
● Insured, being the person with whom the contract was made, is primarily the proper person to bring suit
thereon. Subject to some exceptions, insured may thus sue, although the policy is taken wholly or in
part for the benefit of another person named or unnamed, and although it is expressly made
payable to another as his interest may appear or otherwise.
● Although a policy issued to a mortgagor is taken out for the benefit of the mortgagee and is made payable
to him, yet the mortgagor may sue thereon in his own name, especially where the mortgagee's interest is
less than the full amount recoverable under the policy, . .
It also argued that under volume 33, page 82, of the same work, we read the following:
● Insured may be regarded as the real party in interest, although he has assigned as collateral
security any judgment he may obtain.
***Not in the case but worthwhile to remember that under the current IC:
Sec. 8. Unless the policy otherwise provides, where a mortgagor of property effects insurance in his own name
providing that the loss shall be payable to the mortgagee, or assigns a policy of insurance to a mortgagee, the
insurance is deemed to be upon the interest of the mortgagor, who does not cease to be a party to the original
contract, and any act of his, prior to the loss, which would otherwise avoid the insurance, will have the same effect,
although the property is in the hands of the mortgagee, but any act which, under the contract of insurance, is to be
performed by the mortgagor, may be performed by the mortgagee therein named, with the same effect as if it had
been performed by the mortgagor.
Sec. 9. If an insurer assents to the transfer of an insurance from a mortgagor to a mortgagee, and, at the time of his
assent, imposes further obligation on the assignee, making a new contract with him, the act of the mortgagor cannot
affect the rights of said assignee.
DISPOSITIVE: Wherefore, the judgment appealed from is in accordance with law, and must be, as it is hereby, affirmed,
with costs against the appellant. So ordered.
---------------------------------------------------------------------------------------------------------------------------Geagonia v. CA, 241 SCRA 152 (1995)
DOCTRINE:
A double insurance exists where the same person is insured by several insurers separately in respect of the same subject
and interest. As earlier stated, the insurable interests of a mortgagor and a mortgagee on the mortgaged property are
distinct and separate. Since the two policies of the PFIC do not cover the same interest as that covered by the policy of
the private respondent, no double insurance exists. The non-disclosure then of the former policies was not fatal to the
petitioner's right to recover on the private respondent's policy.
FACTS:
·
Petitioner is the owner of Norman’s Mart located in the public market of San Francisco, Agusan Del Sur. He
obtained from Country Bankers Insurance Co. (CBIC) a fire insurance policy for P100K. The 1-year policy covered the
following: : "Stock-in-trade consisting principally of dry goods such as RTW's for men and women wear and other usual to
assured's business."
·
Petitioner declared in the policy under the subheading entitled CO-INSURANCE that Mercantile Insurance Co., Inc.
was the co-insurer for P50K.
·
The fire insurance policy contained the following condition:
“3. The insured shall give notice to the Company of any insurance or insurances already affected, or which may
subsequently be effected, covering any of the property or properties consisting of stocks in trade, goods in process and/or
inventories only hereby insured, and unless such notice be given and the particulars of such insurance or insurances be
stated therein or endorsed in this policy pursuant to Section 50 of the Insurance Code, by or on behalf of the Company
before the occurrence of any loss or damage, all benefits under this policy shall be deemed forfeited, provided however,
that this condition shall not apply when the total insurance or insurances in force at the time of the loss or damage is not
more than P200,000.00.
·
Fire broke out and petitioner’s insured stock-in-trade were completely destroyed by fire. He then filed a claim
against CBIC which was subsequently DENIED because Geagonia's stocks-in-trade were likewise covered by fire
insurance policies GA-28146 and GA-28144, for P100K each, issued by the Cebu Branch of the Philippines First
Insurance Co., Inc. (PFIC). These policies indicate that the insured was "Messrs. Discount Mart (Mr. Armando Geagonia,
Prop.)" with a mortgage clause reading ""MORTGAGEE: Loss, if any, shall be payable to Messrs. Cebu Tesing Textiles,
Cebu City as their interest may appear subject to the terms of this policy. CO-INSURANCE DECLARED: P100,000. —
Phils. First CEB/F-24758". The basis of CBIC’s denial was Geagonia's alleged violation of Condition 3 of the policy.
·
Geagonia filed a complaint against the private respondent in the Insurance Commission for the recovery of P100K
under fire insurance policy and damages. He claimed that he knew the existence of the other two policies. However, he
had no knowledge of the provision in the private respondent's policy requiring him to inform it of the prior policies and this
requirement was not mentioned to him by the private respondent's agent.
·
The Insurance Commission found that the petitioner did not violate Condition 3 as he had no knowledge of the
existence of the two fire insurance policies obtained from the PFIC; that it was Cebu Tesing Textiles which procured the
PFIC policies without informing him or securing his consent; and that Cebu Tesing Textile, as his creditor, had insurable
interest on the stocks. These findings were based on Geagonia's testimony that he came to know of the PFIC policies
only when he filed his claim with CBIC and that Cebu Tesing Textile obtained them and paid for their premiums without
informing him thereof.
·
The Insurance Commission then ordered the respondent company to pay complainant the sum of P100K with
interest and attorney’s fees.
·
CA reversed the decision of the Insurance Commission because it found that the petitioner knew of the existence of
the two other policies issued by the PFIC.
ISSUE/S:
W/N the petitioner had prior knowledge of the two insurance policies issued by the PFIC when he obtained the fire
insurance policy from the private respondent, thereby, for not disclosing such fact, violating Condition 3 of the policy?
W/N there is double insurance in the case at bar so as to deny Geagonia from recovering on the insurance policy?
RULING:
1.
YES. Petitioner knew of the prior policies issued by the PFIC. His letter of 18 January 1991 to the private
respondent conclusively proves this knowledge. His testimony to the contrary before the Insurance Commissioner and
which the latter relied upon cannot prevail over a written admission madeante litem motam. It was, indeed, incredible that
he did not know about the prior policies since these policies were not new or original.
2.
NONE. Condition 3 of the private respondent's Policy No. F-14622 is a condition which is not proscribed by law.
Its incorporation in the policy is allowed by Section 75 of the Insurance Code which provides that "[a] policy may declare
that a violation of specified provisions thereof shall avoid it, otherwise the breach of an immaterial provision does not
avoid the policy." Such a condition is a provision which invariably appears in fire insurance policies and is intended to
prevent an increase in the moral hazard. It is commonly known as the additional or "other insurance" clause and has been
upheld as valid and as a warranty that no other insurance exists. Its violation would thus avoid the policy. However, in
order to constitute a violation, the other insurance must be upon same subject matter, the same interest therein, and the
same risk.
The fire insurance policies issued by the PFIC name Geagonia as the assured and contain a mortgage
clause which reads: "Loss, if any, shall be payable to MESSRS. TESING TEXTILES, Cebu City as their interest
may appear subject to the terms of the policy."This is clearly a simple loss payable clause, not a standard
mortgage clause.
The Court concludes that (a) the prohibition in Condition 3 of the subject policy applies only to double
insurance, and (b) the nullity of the policy shall only be to the extent exceeding P200,000.00 of the total policies
obtained. The first conclusion is supported by the portion of the condition referring to other insurance "covering
any of the property or properties consisting of stocks in trade, goods in process and/or inventories only hereby
insured," and the portion regarding the insured's declaration on the subheading CO-INSURANCE that the coinsurer is Mercantile Insurance Co., Inc. in the sum of P50K. A double insurance exists where the same person is
insured by several insurers separately in respect of the same subject and interest. Since the insurable interests
of a mortgagor and a mortgagee on the mortgaged property are distinct and separate; the two policies of the
PFIC do not cover the same interest as that covered by the policy of CBIC, no double insurance exists. The nondisclosure then of the former policies was not fatal to Geagonia's right to recover on CBIC’s policy.
As to a mortgaged property, the mortgagor and the mortgagee have each an independent insurable interest
therein and both interests may be one policy, or each may take out a separate policy covering his interest, either at the
same or at separate times. The mortgagor's insurable interest covers the full value of the mortgaged property, even
though the mortgage debt is equivalent to the full value of the property. The mortgagee's insurable interest is to the extent
of the debt, since the property is relied upon as security thereof, and in insuring he is not insuring the property but his
interest or lien thereon. His insurable interest is prima facie the value mortgaged and extends only to the amount of the
debt, not exceeding the value of the mortgaged property. Thus, separate insurances covering different insurable interests
may be obtained by the mortgagor and the mortgagee.
A mortgagor may, however, take out insurance for the benefit of the mortgagee, which is the usual practice. The
mortgagee may be made the beneficial payee in several ways. He may become the assignee of the policy with the
consent of the insurer; or the mere pledgee without such consent; or the original policy may contain a mortgage clause; or
a rider making the policy payable to the mortgagee "as his interest may appear" may be attached; or a "standard
mortgage clause," containing a collateral independent contract between the mortgagee and insurer, may be attached; or
the policy, though by its terms payable absolutely to the mortgagor, may have been procured by a mortgagor under a
contract duty to insure for the mortgagee's benefit, in which case the mortgagee acquires an equitable lien upon the
proceeds.
In the policy obtained by the mortgagor with loss payable clause in favor of the mortgagee as his interest may
appear, the mortgagee is only a beneficiary under the contract, and recognized as such by the insurer but not made a
party to the contract himself. Hence, any act of the mortgagor which defeats his right will also defeat the right of the
mortgagee. This kind of policy covers only such interest as the mortgagee has at the issuing of the policy.
On the other hand, a mortgagee may also procure a policy as a contracting party in accordance with the terms of
an agreement by which the mortgagor is to pay the premiums upon such insurance. It has been noted, however, that
although the mortgagee is himself the insured, as where he applies for a policy, fully informs the authorized agent of his
interest, pays the premiums, and obtains on the assurance that it insures him, the policy is in fact in the form used to
insure a mortgagor with loss payable clause.
PETITION GRANTED.
---------------------------------------------------------------------------------------------------------------- -----------Saura Import & Export v Phil Int’l Surety, PNB, 8 SCRA 143 (1963)
DOCTRINE:
If a mortgage or lien exists against the property insured, and the policy contains a clause stating that loss, if any, shall be
payable to such mortgagee or the holder of such lien as interest may appear, notice of cancellation to the mortgagee or
lienholder alone is ineffective as a cancellation of the policy to the owner of the property. Notice must also be sent to the
insured.
FACTS:
● On Dec. 26, 1952, plaintiff Saura Import mortgaged to PNB a parcel of land to secure the payment of a
promissory note on P27,000 which was then later increased to P37,000. A building was erected on the land which
was covered by an insurance even prior to the execution of the mortgage contract.
● Pursuant to the mortgaged agreement, Saura insured the building and its contents with the Philippine
International Surety Co (PISC) for P29,000 against fire for a period of 1 year from Oct. 2, 1954.
● The insurance policy was endorsed to the mortgagee PNB, in a Memo which states — Loss if any, payable to the
Philippine National Bank as their interest may appear, subject to the terms, conditions and warranties of this
policy.
● The policy was delivered to PNB by Saura.
● On Oct. 15, 1954, barely 13 days after the issuance of the fire insurance, PISC cancelled it effective as of date of
issue. A written cancellation notice was sent to PNB.
● On Apr. 6, 1955, the building and its contents worth P4,685 were burned. On April 11, 1985, Saura filed a claim
with PISC and mortgagee bank.
● Upon presentation of notice of loss with PNB, Saura learned for the first time that the policy had been previously
canceled by PISC, when Saura’s folder in the bank’s file was opened and the notice of the cancellation by PISC
was found.
● Upon refusal of PISC to pay the amount of the insurance, Saura filed a case with the CFI.
● The CFI dismissed the complaint.
ISSUE:
WON the policy was properly cancelled thus barring Saura’s claim.
HELD:
NO. Actual notice of cancellation in a clear and unequivocal manner, preferably in writing, in view of the importance of an
insurance contract, should be given by the insurer to the insured, so that the latter might be given an opportunity to obtain
other insurance for his own protection. The notice should be personal to the insured and not to and/or through any
unauthorized person by the policy.
In the case at bar, the defendant insurance company, must have realized the paramount importance of sending a notice
of cancellation, when it sent the notice of cancellation of the policy to the defendant bank (as mortgagee), but not to the
insured with which it (insurance company) had direct dealing. It was the primary duty of the defendant-appellee insurance
company to notify the insured, but it did not. Both the insurance company and the appellee bank failed, wittingly or
unwittingly, to notify the insured appellant Saura of the cancellation made.
The defendant insurance company contends that it gave notice to the defendant-appellee bank as mortgagee of the
property, and that was already a substantial compliance with its duty to notify the insured of the cancellation of the policy.
But notice to the bank, as far appellant herein is concerned, is not effective notice.
If a mortgage or lien exists against the property insured, and the policy contains a clause stating that loss, if any, shall be
payable to such mortgagee or the holder of such lien as interest may appear, notice of cancellation to the mortgagee or
lienholder alone is ineffective as a cancellation of the policy to the owner of the property.
---------------------------------------------------------------------------------------------------------------------------Phil. National Bank v CA, 158 SCRA 201 (1988)
DOCTRINE: The petitioner as the attorney-in-fact of the private respondents and as the beneficiary of the insurance policy
had the obligation to collect the proceeds of the policy.
FACTS:the private respondents-spouses applied for a retailers' loan with the petitioner. The loan which was subsequently
approved was secured by a chattel mortgage consisting of the verified inventory of stocks in the store of the private
respondents. In addition the goods and merchandise, subject matter of the mortgage, were insured with the Cosmopolitan
Insurance Go. in the amount of P 4,000.00 with the petitioner as the beneficiary pursuant to the requirements of the latter.
On August 1, 1964, while the insurance and the chattel mortgage were still in force, and after the private respondents had
paid the petitioner the amount of P 1,089.60 as partial payment; the insured building and merchandise of the private
respondents were totally destroyed by fire.
The petitioner sent several letters to the insurance company for the purpose of recovering the proceeds of the insurance
but to no avail. Sometime in 1966, the said insurance company became the subject of liquidation. Seven years after the
insured chattels mortgaged were burned, the petitioner filed a complaint for collection against the private respondents.
The petitioner filed the complaint to recover the aggregate sum of P 3,855.60 to the City Court of Zamboanga city. The
court in its decision held that the amount of unpaid sum of P1,089.60 by the defendants Ignacio and Victoria Desiderio is
irrevocable and the case is dismissed. The decision is affirmed by both the CFI and CA
Hence the Case.
ISSUE: Whether the petitioners as attorney in fact of private respondents is bound to successfully collect the insurance
proceeds of the mortgaged property of the latter.
HELD: No,
The petitioner as the attorney-in-fact of the private respondents and as the beneficiary of the insurance policy had the
obligation to collect the proceeds of the policy.
"under the chattel mortgage covering the goods offered as security for payment of the loan, the private respondents as
mortgagors constituted and appointed the petitioner as mortgagee their attorney-in-fact with full power and authority to
collect and receive any interest, income or benefits produced by the mortgaged property and apply such amount collected
and received in payment of the interest accruing and of the principal obligation.
The petitioner could have collected the insurance proceeds if only it were not negligent. It had ample time and enough
legal remedies, not to mention resources, to collect the insurance proceeds when the same became due, yet, it merely
sent demand letters to the insurance company. And when the company did not act on the letters, the petitioner did not
pursue other remedies to press its claim. It did not even file a suit for the recovery of the insurance proceeds against the
insurance company before and even during the liquidation of the company. It allowed seven long years to pass before
finally deciding to file a collection case. Realizing that it could no longer collect from the insurance company because the
same had already folded up, the petitioner directed the collection suit against the private respondents whose obligation
with the petitioner had long been extinguished.
The private respondents cannot have been expected to initiate moves for the collection of the insurance proceeds. It was
the petitioner which was duty bound to enforce the claim for the insurance proceeds, being, as earlier mentioned, the
attorney-in-fact of the private respondents and the beneficiary of the insurance policy.
Case dismissed
---------------------------------------------------------------------------------------------------------------------------Lalican v. Insular Life, 597 SCRA 159 (2009)
DOCTRINE:
● The existence of an insurable interest gives a person the legal right to insure the subject matter of the policy of
insurance. Section 10 of the Insurance Code indeed provides that every person has an insurable interest in his
own life. Section 19 of the same code also states that an interest in the life or health of a person insured must
exist when the insurance takes effect, but need not exist thereafter or when the loss occurs.
● The contract is the law between the parties. here, it is clear with regard to reinstatement
FACTS:
● Eulogio Lalican died; widow - Violeta
○ During his lifetime, Eulogio applied insurance policy with Insular Life, through agent Josephine Malaluan
○ Insurance policy was issued on 24 April 1997
■ which contained a 20-Year Endowment Variable Income Package Flexi Plan worth P500,000.00,
with two riders valued at P500,000.00 each. Thus, the value of the policy amounted to
P1,500,000.00. Violeta was named as the primary beneficiary
■ Premiums – to be paid quarterly(april, july,october,january); P8, 062.00; if defaulted, and after the
lapse of grace period, policy would be automatically void
● Eulogio paid to pay 3rd installment on Jan 1998, the policy, therefore, lapsed and became void
● Eulogio applied for reinstatement of policy along with the unpaid P8, 062.00
○ HOWEVER, he was advised to file another reinstatement application because there is an overdue
interest of P322.48
○ He was also advised to pay premiums to Malaluan, the insular life agent
● 17 Sept 1998, Malaluan was away for business so her husband was the one who received Eulogio’s 2 nd
application for reinstatement and premiums. The husband issued a receipt to Eulogio.
● SAME DAY, 17 Sept 1998, Eulogio died of cardio-respiratory arrest secondary to electrocution.
● NOT knowing Eulogio’s death, Malaluan forwarded to Insular life the application for reinstatement but Insular did
not process since it was aware of Eulogio’s death
● 28 Sept 1998, Violeta filed with Insular Life claim for payment of the full proceeds of the policy – DENIED
○ Insular just gave refund of all the payments made, around 25k
● Violeta returned the 25k-check to Insular Life
● RTC dismissed claims for death benefits
○ Took into account the clear provisions of the Policy Contract; Eulogio was not able to fully comply with the
requirements for the reinstatement of Policy No. 9011992
○ The well-settled rule is that a contract has the force of law between the parties
○
Nowhere in the policy or in the application for reinstatement was it ever mentioned that the
payment of premiums would have the effect of an automatic and immediate renewal of the lapsed
policy. Instead, what was clearly stated in the application for reinstatement is that pending
approval thereof, the premiums paid would be treated as a “deposit only and shall not bind the
company until this application is finally approved during my/our” lifetime and good health[.]”
○ Again, the court finds nothing in the aforesaid provisions that would even suggest an ambiguity either in
the words used or in the manner they were written. [Violeta] did not present any proof that [Eulogio] was
not conversant with the English language. Hence, his having personally signed the application for
reinstatement[,] which consisted only of one page, could only mean that he has read its contents and that
he understood them. x x x
● RTC denied notice of appeal
● Hence, SC, Certiorari 45
ISSUES:
● (Violeta’s issue)WON Eulogio had an existing insurable interest in his own life until the day of his death.
IRRELEVANT
○ REAL ISSUE: WON Eulogio was able to reinstate the lapsed insurance policy on his life before his death
on 17 September 1998. NO
HELD:
● SC - denied Violeta’s claim
● JUST FOR THE SAKE OF DEFINING INSURABLE INTEREST :))An insurable interest is one of the most basic
and essential requirements in an insurance contract. In general, an insurable interest is that interest which a
person is deemed to have in the subject matter insured, where he has a relation or connection with or concern in
it, such that the person will derive pecuniary benefit or advantage from the preservation of the subject matter
insured and will suffer pecuniary loss or damage from its destruction, termination, or injury by the happening of
the event insured against.
● Additional conditions for reinstatement of a lapsed policy were stated in the Application for Reinstatement which
Eulogio signed and submitted, to wit:
I/We agree that said Policy shall not be considered reinstated until this application is
APPROVED by the Company during my/our lifetime and good health and until all other
Company requirements for the reinstatement of said Policy are fully satisfied.
● In the instant case, Eulogio’s death rendered impossible full compliance with the conditions for reinstatement of
Policy No. 9011992. True, Eulogio, before his death, managed to file his Application for Reinstatement and
deposit the amount for payment of his overdue premiums and interests thereon with Malaluan; but Policy No.
9011992 could only be considered reinstated after the Application for Reinstatement had been processed and
approved by Insular Life during Eulogio’s lifetime and good health.
---------------------------------------------------------------------------------------------------------------------------El Oriente v Posadas, 54 Phil 147
DOCTRINE: Proceeds from life insurance are exempted from income tax, because such proceeds are just indemnity
FACTS:
● March 18, 1925: El Oriente, Fabrica de Tabacos, Inc. in order to protect itself against the loss that it might suffer
by reason of the death of its manager, A. Velhagen, who had more than 35 years of experience in the
manufacture of cigars in the Philippine Islands, and whose death would be a serious loss procured from the
Manufacturers Life Insurance Co., of Toronto, Canada, thru its local agent E.E. Elser, an insurance policy on the
life of A. Velhagen for $50,000
○ designated itself as the sole beneficiary
● Upon the death of A. Velhagen in the year 1929, El Oriente received all the proceeds of the life insurance policy,
together with the interests and the dividends accruing thereon, aggregating P104,957.88
● Collector of Internal Revenue assessed and levied the sum of P3,148.74 as income tax on the proceeds of the
insurance policy which tax El Oriente paid
ISSUE: WON proceeds of life insurance policies paid to corporate beneficiaries upon the death of the insured are also
exempted
HELD: Yes.
It is certain that the proceeds of life insurance policies are exempt. It is not so certain that the proceeds of life insurance
policies paid to corporate beneficiaries upon the death of the insured are likewise exempt. But at least, it may be said that
the law is indefinite in phraseology and does not permit us unequivocally to hold that the proceeds of life insurance
policies received by corporations constitute income which is taxable.
When not only in the part of the law concerning individuals were exemptions provided for beneficiaries, but also in the part
concerning corporations, specific reference was made to the exemptions in favor of individuals, thereby making the same
applicable to corporations.
In reality, what the plaintiff received was in the nature of an indemnity for the loss which it actually suffered
because of the death of its manager.
It is earnestly pressed upon us that proceeds of life insurance paid on the death of the insured are in fact capital,
and cannot be taxed as income
It is enough to sustain our construction of the act to say that proceeds of a life insurance policy paid on the death of the
insured are not usually classed as income.
. . . Life insurance in such a case is like that of fire and marine insurance, — a contract of indemnity.
The benefit to be gained by death has no periodicity. It is a substitution of money value for something permanently lost,
either in a house, a ship, or a life. Assuming, without deciding, that Congress could call the proceeds of such indemnity
income, and validly tax it as such, we think that, in view of the popular conception of the life insurance as resulting in a
single addition of a total sum to the resources of the beneficiary, and not in a periodical return, such a purpose on its part
should be express, as it certainly is not here.
We deem it reasonable to hold the proceeds of the life insurance policy in question as representing an indemnity
and not taxable income.
---------------------------------------------------------------------------------------------------------------- -----------Insular Life v Ebrado, 80 SCRA 181 (1977)
DOCTRINE:: any person who is forbidden from receiving any donation under Art 739 cannot be named beneficiary of a
life insurance policy by the person who cannot make a donation to him
a life insurance policy is no different from a civil donation insofar as the beneficiary is concerned. Both are founded upon
the same consideration: liberality. A beneficiary is like a donee, because from the premiums of the policy which the
insured pays out of liberality,the beneficiary will receive the proceeds or profits of said insurance.
FACTS:
Buenaventura Ebrado was issued a Life Assurance policy with a rider for Accidental Death. He designated T. Ebrado as
the revocable beneficiary of the policy.
Buenaventura Ebrado died as a result when he was hit by a falling branch of a tree. T. Ebrado filed with the insurer a
claim for the proceeds of the Policy as the designated beneficiary, although she admits that she and the insured
Buenaventura were merely living as husband and wife without the benefit of marriage.
Pascuala vda. De ebrado (the legal wife) also filed her claim as the widow of the deceased insured. She asserts that she
is the one entitled to the proceeds and not the common law wife Carponia T. Ebrado.
The insurance company, not knowing what to do, filed an interpleader with the CFI.
During the pretrial,the parties agreed to some stipulations of fact,one of which was that the insured was married to
Pascuala and that the insured was living as husband and wife with someone else , which was Carponia. It was also
agreed upon that it was Carponia who was the beneficiary but the insured made a reservation to change the beneficiary
although the same was never changed. In addition,the wife did not have the opportunity to write the name of the company
that there was a reservation to change the designation of the parties.
RTC disqualified Carponia from becoming beneficiary of the insured based on Art. 739.
CA affirmed the decision of the RTC.
ISSUE:WON a common law wife named as beneficiary in the life insurance of a legally married man claim the proceeds
thereof in case of the death pf the latter? NO.
HELD:
Section 50 of the Insurance Act Provides that:
"The insurance shall be applied exclusively to the proper interest of the person in whose name it is made"
The word "interest" highly suggests that the provision refers only to the insured and not to the beneficiary, since a contract
of insurance is personal in character. Otherwise, the prohibitory laws against illicit relationships especially on property and
descent will be rendered nugatory, as the same could easily be circumvented by modes of insurance.
Article 2011 states:
The contract of insurance is governed by special laws. Matters not expressly provided for in such special laws shall be
regulated by this Code.
Article 2012:
Any person who is forbidden from receiving any donation under Art 739 cannot be named beneficiary of a life insurance
policy by the person who cannot make a donation to him.
In essence a life insurance policy is no different from a civil donation insofar as the beneficiary is concerned. Both are
founded upon the same consideration: liberality. A beneficiary is like a donee, because from the premiums of the policy
which the insured pays out of liberality,the beneficiary will receive the proceeds or profits of said insurance.
Art 739 should therefore equally operate in life insurance contracts. The mandate of Article 2p12 cannot be set aside.
From the said article, it is also clear that no conviction is required, the guilt of the donee may be proved by preponderance
of evidence.
The requisite proof of common law relationship between the insured and the beneficiary has been conveniently supplied
by the stipulations between the parties in the pretrial conference of the case. Hence, the findings and judgment of the
lower court was AFFIRMED.
---------------------------------------------------------------------------------------------------------------------------Vda. De Consuegra v GSIS, 37 SCRA 316 (1971)
DOCTRINE: In case of failure to name a beneficiary in an insurance policy, the proceeds will accrue to the estate of the
insured.
FACTS:> Jose Consuegra was employed as a shop foreman of the Office of the District Engineer in Surigao Del Norte.
> When he was still alive, he contracted two marriages:
o
First – Rosario Diaz; 2 children = Jose Consuegra Jr. and Pedro but both predeceased him
o
2nd – Basilia Berdin; 7 children. (this was contracted in GOOD FAITH while the first marriage subsisted)
> Being a GSIS member when he died, the proceeds of his life insurance were paid by the GSIS to Berdin and her
children who were the beneficiaries named in the policy.
> Since he was in the gov’t service for 22.5028 years, Consuegra was entitled to retirement insurance benefits in the sum
of P6,304.47 pursuant to Section 12(c) of Commonwealth Act 186 as amended by Republic Acts 1616 and 3836.
> Both families filed their claims with the GSIS,
> Trial court held:
"When two women innocently and in good faith are legally united in holy matrimony to the same man, they and their
children, born of said wedlock, will be regarded as legitimate children and each family be entitled to one half of the estate
> TC ruled that the legal heirs were Diaz who is entitled to one-half or 8/16 of the retirement benefits and Berdin and her
children were entitled to the remaining half, each to receive an equal share of 1/16.
> Berdin went to CFI on appeal. CFI affirmed GSIS decision.
ISSUE: To whom should the retirement insurance benefits be paid?
HELD: Both families are entitled to half of the retirement benefits.
It is the contention of appellants that the lower court erred in not holding that the designated beneficiaries in the life
insurance of the late Jose Consuegra are also the exclusive beneficiaries in the retirement insurance of said deceased. In
other words, it is the submission of appellants that because the deceased Jose Consuegra failed to designate the
beneficiaries in his retirement insurance, the appellants who were the beneficiaries named in the life insurance should
automatically be considered the beneficiaries to receive the retirement insurance benefits, to the exclusion of respondent
Rosario Diaz. From the arguments adduced by appellants in their brief We gather that it is their stand that the system of
life insurance and the system of retirement insurance, that are provided for in Commonwealth Act 186 as amended, are
simply complementary to each other, or that one is a part or an extension of the other, such that whoever is named the
beneficiary in the life insurance is also the beneficiary in the retirement insurance when no such beneficiary is named in
the retirement insurance.
The contention of appellants is untenable.
The beneficiary named in the life insurance does NOT automatically become the beneficiary in the retirement insurance.
When Consuegra, during the early part of 1943, or before 1943, designated his beneficiaries in his life insurance, he could
NOT have intended those beneficiaries of his life insurance as also the beneficiaries of his retirement insurance because
the provisions on retirement insurance under the GSIS came about only when CA 186 was amended by RA 660 on June
18, 1951.
Subsection (b) of Section 11 of Com. Act 186, as amended by Rep. Act 660, provides as follows:
(b)
Survivors benefit. — Upon death before he becomes eligible for retirement, his beneficiaries as recorded in the
application for retirement annuity filed with the System shall be paid his own premiums with interest of three per centum
per annum, compounded monthly. If on his death he is eligible for retirement, then the automatic retirement annuity or the
annuity chosen by him previously shall be paid accordingly.
Sec. 11(b) clearly indicates that there is need for the employee to file an application for retirement insurance benefits
when he becomes a GSIS member and to state his beneficiary. The life insurance and the retirement insurance are two
separate and distinct systems of benefits paid out from 2 separate and distinct funds.
Hence, the beneficiary named in the life insurance does not automatically become the beneficiary in the retirement
insurance unless the same beneficiary in the life insurance is so designated in the application for retirement insurance.
Retirement insurance is primarily intended for the benefit of the employee — to provide for his old age, or incapacity, after
rendering service in the government for a required number of years. If the employee reaches the age of retirement, he
gets the retirement benefits even to the exclusion of the beneficiary or beneficiaries named in his application for retirement
insurance. The beneficiary of the retirement insurance can only claim the proceeds of the retirement insurance if the
employee dies before retirement. If the employee failed or overlooked to state the beneficiary of his retirement insurance,
the retirement benefits will accrue to his estate and will be given to his legal heirs in accordance with law, as in the case of
a life insurance if no beneficiary is named in the insurance policy.
It is Our view, therefore, that the respondent GSIS had correctly acted when it ruled that the proceeds of the retirement
insurance of the late Jose Consuegra should be divided equally between his first living wife Rosario Diaz, on the one
hand, and his second wife Basilia Berdin and his children by her, on the other; and the lower court did not commit error
when it confirmed the action of the GSIS, it being accepted as a fact that the second marriage of Jose Consuegra to
Basilia Berdin was contracted in good faith.
In case of failure to name a beneficiary in an insurance policy, the proceeds will accrue to the estate of the insured. And
when there exists two marriages, each family will be entitled to one-half of the estate.
---------------------------------------------------------------------------------------------------------------------------Southern Luzon Employees v Golpeo, 96 Phil 84 (1954)
Doctrine:
The legal wife may be estopped to question the illegality of his husband’s act of naming as beneficiary her husband’s
common-law wife if, by her silence and inaction, she had acquiesced in the illicit relationship of his husband with another
woman.
Facts:
Southern Luzon Employees' Association (SLEA) is composed of laborers and employees of Laguna Tayabas Bus Co.,
and Batangas Transportation Company, and one of its purposes is mutual aid of its members and their dependents in
case of death. Roman A. Concepcion (Concepcion) was a member until his death on 13 December 1950.
On 17 September 1949, the association adopted a resolution which allows: (1) the insured to choose his/her common-law
wife/husband as his/her beneficiary or; (2) if the insured is a widower, his legitimate children under the first marriage who
are below 21 years of age and his common-law wife may be instituted as beneficiaries.
In the form required by the association to be accomplished by its members, with reference to the death benefit, Roman A.
Concepcion listed as his beneficiaries Aquilina Maloles, Roman M. Concepcion, Jr., Estela M. Concepcion, Rolando M.
Concepcion and Robin M. Concepcion.
After the death of Roman A. Concepcion, the association was able to collect voluntary contributions from its members
amounting to P2,5055. Three sets of claimants presented themselves, namely, (1) Juanita Golpeo, legal wife of Roman A.
Concepcion, and her children, named beneficiaries by the deceased; (2) Aquilina Maloles, a common law wife of Roman
Concepcion and her children and; (3) Elsie Hicban, another common law wife of Roman A. Concepcion, and her child.
Because of the conflicting claims, SLEA instituted in the Court of First Instance of Laguna the present action for
interpleading against the three conflicting claimants as defendants. Marcelino and Josefina Concepcion, children of the
deceased Roman A. Concepcion with Juanita Golpeo, intervened in their own rights, aligning themselves with the
defendants, Juanita Golpeo and her minor children.
CFI: declared Aquilina Maloles and her children as the sole beneficiaries of the sum of P2,505.00, and ordered SLEA to
deliver said amount to them.
Issue/s:
(1) Whether the Insurance Law is applicable to the case at bar.
(2) Whether the proceeds of the life insurance exclusively belonged to the beneficiaries.
(3) Whether Aquilina Maloles, as a common-law wife, may validly claim the proceeds of the life insurance of Ramon
Concepcion.
Held:
(1)
Yes;
The trial court has correctly considered the death benefit in question as analogous to an insurance. Moreover, section
1628 of the Revised Administrative Code defines a mutual benefit association as one, among others, "providing for any
method of accident or life insurance among its members out of dues or assessments collected from the membership."
Therefore, the Insurance Law could apply.
(2)
Yes;
Citing the case of Del Val vs. Del Val, 29 Phil., 534:
With the finding of the trial court that the proceeds of the life-insurance policy belongs exclusively to the defendant
as his individual and separate property, we agree. That the proceeds of an insurance policy belong exclusively to
the beneficiary and not to the estate of the person whose life was insured, and that such proceeds are the
separate and individual property of the beneficiary, and not of the heirs of the person whose life was insured, is
the doctrine in America.
(3)
Yes;
Junaita Golpeo cites article 2012 of the new Civil Code providing that "Any person who is forbidden from receiving any
donation under article 739 cannot be named beneficiary of a life insurance policy and by the person who cannot make any
donation to him, according to said article." Inasmuch as, according to article 739 of the new Civil Code, a donation is valid
when made "between persons who are guilty or adultery or concubinage at the time of the donation," it is alleged that the
Aquilina Maloles, cannot be named a beneficiary.
However, Juanita Golpeo (legal wife), by her silence and actions, had acquiesced in the illicit relations between her
husband and Aquilina Maloles. Therefore, Juanita Golpeo’s argument (that Article 2012 in relation to Article 739 would
apply) would certainly not apply to Aquilina and at the same time to the children of Roman Concepcion with Aquilina who
were likewise named beneficiaries by the deceased Roman A. Concepcion.
Dispositive Portion: Wherefore, the appealed decision is affirmed, and it is so ordered without costs.
---------------------------------------------------------------------------------------------------------------------------Heirs of Maramag v Maramag, 588 SCRA 774 (2009)
DOCTRINE: It is only in cases where the insured has not designated any beneficiary, or when the designated beneficiary
is disqualified by law to receive the proceeds, that the insurance policy proceeds shall redound to the benefit of the estate
of the insured
FACTS:
·
The petition alleged that:
o
(1) petitioners were the legitimate wife and children of Loreto Maramag (Loreto), while respondents were Loreto’s
illegitimate family;
o (2) Eva de Guzman Maramag (Eva) was a concubine of Loreto and a suspect in the killing of the latter, thus, she is
disqualified to receive any proceeds from his insurance policies from Insular Life Assurance Company, Ltd. (Insular)and
Great Pacific Life Assurance Corporation (Grepalife);
o (3) the illegitimate children of Loreto—Odessa, Karl Brian, and Trisha Angelie—were entitled only to one-half of the
legitime of the legitimate children, thus, the proceeds released to Odessa and those to be released to Karl Brian and
Trisha Angelie were inofficious and should be reduced; and
o (4) petitioners could not be deprived of their legitimes, which should be satisfied first.
o In support of the prayer for TRO and writ of preliminary injunction, petitioners alleged, among others, that part of the
insurance proceeds had already been released in favor of Odessa, while the rest of the proceeds are to be released in
favor of Karl Brian and Trisha Angelie, both minors, upon the appointment of their legal guardian. Petitioners also prayed
for the total amount of P320,000.00 as actual litigation expenses and attorney’s fees
● Loreto Maramag designated as beneficiary his concubine Eva de Guzman Maramag
● Vicenta Maramag and Odessa, Karl Brian, and Trisha Angelie (heirs of Loreto Maramag) and his concubine Eva
de Guzman Maramag (EVA- also suspected in the killing of Loreto) and his illegitimate children are ALL claiming
for his insurance.
● Vicenta Maramag alleges that Eva is disqualified from claiming because Loreto misrepresented Eva as his
legitimate wife and Odessa, Karl Brian, and Trisha Angelie as his legitimate children, and that they filed their
claims for the insurance proceeds of the insurance policies; that when the INSURER ascertained that Eva was
not the legal wife of Loreto
● RTC: Petition Granted - Civil Code does NOT apply. The principal law on insurance is the Insurance Code, as
amended. Only in case of deficiency in the Insurance Code that the Civil Code may be resorted to. (Enriquez v.
Sun Life Assurance Co., 41 Phil. 269.)
● CA: dismissed the case for lack of jurisdiction for filing beyond reglementary period
ISSUE: W/N Eva can claim the Insurance proceeds even though it is prohibited under the Civil Code provisions against
donation?
HELD: YES. Petition is DENIED.
● Any person who is forbidden from receiving any donation under Article 739 cannot be named beneficiary of a life
insurance policy of the person who cannot make any donation to him
○ If a concubine is made the beneficiary, it is believed that the insurance contract will still remain valid, but
the indemnity must go to the legal heirs and not to the concubine, for evidently, what is prohibited under
Art. 2012 is the naming of the improper beneficiary.
● SECTION 53. The insurance proceeds shall be applied exclusively to the proper interest of the person in whose
name or for whose benefit it is made unless otherwise specified in the policy.
○
○
General Rule: only persons entitled to claim the insurance proceeds are either the insured, if still alive; or
the beneficiary, if the insured is already deceased, upon the maturation of the policy.
EX: situation where the insurance contract was intended to benefit third persons who are not parties to
the same in the form of favourable stipulations or indemnity. In such a case, third parties may directly sue
and claim from the insurer.
---------------------------------------------------------------------------------------------------------------------------Philamcare v CA, 379 SCRA 356 (2002)
Doctrine: The health care agreement is in the nature of a contract of indemnity. Hence, payment should be made
to the party who incurred the expenses. It is not controverted that respondent paid all the hospital and medical
expenses. She is therefore entitled to reimbursement. The records adequately prove the expenses incurred by
respondent for the deceased’s hospitalization, medication and the professional fees of the attending physicians.
Facts: In 1988, Ernani Trinos applied for a health care insurance under the Philamcare Health Systems. He was asked if
he was ever treated for high blood, heart trouble, diabetes, cancer, liver disease, asthma, or peptic ulcer; he answered no.
His application was approved and it was effective for one year. His coverage was subsequently renewed twice for one
year each. While the coverage was still in force in 1990, Ernani suffered a heart attack for which he was hospitalized. The
cost of the hospitalization amounted to P76,000.00. Julita Trinos, wife of Ernani, filed a claim before Philamcare for them
to pay the hospitalization cost. Philamcare refused to pay as it alleged that Ernani failed to disclose the fact that he was
diabetic, hypertensive, and asthmatic. Julita ended up paying the hospital expenses. Ernani eventually died. In July 1990,
Julita sued Philamcare for damages. Philamcare alleged that the health coverage is not an insurance contract; that the
concealment made by Ernani voided the agreement.
ISSUE: Whether or not Philamcare can avoid the health coverage agreement.
HELD: No. The health coverage agreement entered upon by Ernani with Philamcare is a non-life insurance contract and
is covered by the Insurance Law. It is primarily a contract of indemnity. Once the member incurs hospital, medical or any
other expense arising from sickness, injury or other stipulated contingent, the health care provider must pay for the same
to the extent agreed upon under the contract. There is no concealment on the part of Ernani. He answered the question
with good faith. He was not a medical doctor hence his statement in answering the question asked of him when he was
applying is an opinion rather than a fact. Answers made in good faith will not void the policy.
Further, Philamcare, in believing there was concealment, should have taken the necessary steps to void the health
coverage agreement prior to the filing of the suit by Julita. Philamcare never gave notice to Julita of the fact that they are
voiding the agreement. Therefore, Philamcare should pay the expenses paid by Julita.
------------------------------------------------------------------------------------ ---------------------------------------Nario V Phil Am Life, 20 SCRA 434 (1967)
DOCTRINE: Parent's authority over the estate of the ward as a legal-guardian does not extend to acts of encumbrance or
disposition, as distinguished from acts of management or administration. This rule applies to Insurance policies where the
minor is named as an irrevocable beneficiary.
FACTS:
Mrs. Alejandra Santos-Mario was issued, on June 12, 1959, by the Philippine American Life Insurance Co., a life
insurance policy under a 20-year endowment plan, with a face value of P5,000.00.
She designated her husband, Delfin Nario, and their unemancipated minor son, Ernesto Nario, as her irrevocable
beneficiaries.
Mrs. Nario applied for a loan on the above stated policy, which she has been entitled to avail of under one of the
provisions of said policy after the same has been in force for three (3) years, for the purpose of using the proceeds thereof
for the school expenses of her minor son, Ernesto Nario.
Said application bore the written signature and consent of Delfin Nario in two capacities: first, as one of the
irrevocable beneficiaries of the policy; and the other, as the father-guardian of said minor son and irrevocable beneficiary,
Ernesto Nario, and as the legal administrator of the minor's properties, pursuant to Article 320 of the Civil Code of the
Philippines.
Philiam Life denied said application, saying that the written consent for the minor son must not only be given by his
father as legal guardian but it must also be authorized by the court in a competent guardianship proceeding.
After the denial of said policy loan application, Mrs. Nario decided to withdraw her policy to the Insurance
Company, which she was also entitled to avail of under one of the provisions of the same policy, and demanded its cash
value which then amounted to P520.00.
Philiam Life also denied the surrender of the policy, on the same ground as that given in disapproving the policy
loan application.
Mrs. Nario sued PHILAMLIFE praying that the latter grant their loan application and/or accept the surrender of said
policy in exchange for its cash value. RTC Ruled in favor of Philam Life, case directly elevated to the SC as this involved
pure question of law
ISSUE: Whether or not parents as guardians can enter into transactions for the benefit of irrevocable beneficiaries who
are minors?
HELD: NO. RTC ruling affirmed.
The full face value of the policy is P5,000.00 and the minor's vested interest therein, as one of the two (2) irrevocable
beneficiaries, consists of one-half (½) of said amount or P2,500.00.
Article 320 of the Civil Code of the Philippines provides —
The father, or in his absence the mother, is the legal administrator of the property pertaining to the child under parental
authority. If the property is worth more than two thousand pesos, the father or mother shall give a bond subject to the
approval of the Court of First Instance. And article 326 of the same Code reads —
When the property of the child is worth more than two thousand pesos, the father or mother shall be considered a
guardian of the child's property, subject to the duties and obligations of guardians under the Rules of Court.
The above quoted provisions of the Civil Code have already been implemented and clarified in our Revised Rules of Court
which provides —
SEC. 7. Parents as guardians. — When the property of the child under parental authority is worth two thousand pesos or
less, the father or the mother, without the necessity of court appointment, shall be his legal guardian. When the property
of the child is worth more than two thousand pesos, the father or the mother shall be considered guardian of the child's
property, with the duties and obligations of guardians under these rules, and shall file the petition required by Section 2
hereof. For good reasons the court may, however, appoint another suitable person. (Rule 93).
---------------------------------------------------------------------------------------------------------------------------Phil Am Life v Pineda, 175 SCRA 416 (1989)
DOCTRINE: It is only with the consent of all the beneficiaries that any change or amendment in the policy concerning the
irrevocable beneficiaries may be legally and validly effected.
A parent-insured cannot act in behalf of his children beneficiaries to ratify an amendment to the beneficiaries/ life policy.
FACTS: On 15 January 1968 Rodolfo Dimayuga procured an ordinary life insurance policy with Philam Life and
designated his wife and children as irrevocable beneficiaries. On 22 February 1980 Dimayuga filed a petition to amend
the designation of the beneficiaries in his life policy from irrevocable to revocable. Philam opposed the petition and
requested for the resetting of the hearing. However, the hearing was still held and the respondent Judge Pineda issued
the order allowing the petition. The motion for reconsideration was denied Hence, this petition.
ISSUES:
1. WON the designation of irrevocable beneficiaries could be change or amended without the consent of all the
irrevocable beneficiaries.
2. WON the irrevocable beneficiaries, one of whom is already deceased while the others are still minors, could validly give
consent to the change or amendment in the designation of irrevocable beneficiaries.
HELD:
1. NO. The law applicable in this case is the Insurance Act (Act No. 2427), the policy being procured in 1968. Under the
said law, the beneficiary designated in a life insurance contract cannot be changed without the consent of the beneficiary
because he has a vested interest in the policy. Based on the book by Campos and Campos entitled, “Notes and Cases on
Insurance Law, “the insured can do nothing to divest the beneficiary of his rights without his consent. He cannot assign
this policy, nor even take its cash surrender value without the consent of the beneficiary. The insured may not even add
another beneficiary because by doing so, he diminishes the amount which the beneficiary may recover and this he cannot
do without the beneficiary’s consent.”
2. NO. The beneficiaries, all minor children of Dimayuga, cannot validly give their consent for the lack thereof. An alleged
acquiescence of the children beneficiaries of the policy cannot be considered an effective ratification to the change f the
beneficiaries from irrevocable to revocable.
---------------------------------------------------------------------------------------------------------------------------Villanueva v Oro, 81 Phil 464 (1948)
G.R. No. L-2227
August 31, 1948
Intestate estate of the late Esperanza J. Villanueva. MARIANO J. VILLANUEVA, claimant-appellant,
vs.
PABLO ORO, administrator.
DOCTRINE:The interest of the insured in the proceeds of the insurance depends upon his survival of the expiration of
endowment period. Upon the insured's death, within the period, the beneficiary will take, as against the personal
representative or the assignee of the insured. If the insured dies after the period, then the proceeds shall be payable to
her estate (unless otherwise assigned to another before she died).
FACTS:
● ESPERANZA VILLANUEVA (insured) has two life insurance policies with West Coast Life Insurance (insurer)
wherein the latter agreed to "to pay two thousand pesos, at the home office of the Company, in San Francisco,
California, to the insured hereunder, if living, on the 1st day of April 1943, or to the beneficiary Bartolome
Villanueva, father of the insured, immediately upon receipt of due proof of the prior death of the insured,
Esperanza J. Villanueva, of La Paz, Philippine Islands, during the continuance of this policy, with right on the part
of the insured to change the beneficiary.
● BARTOLOME WAS LATER REPLACED BY MARIANO, Esperanza’s brother ( the petitioner) as beneficiary.
● Esperanza J. Villanueva survived the insurance period, for she died only on October 15, 1944, without,
however, collecting the insurance proceeds.
● Adverse claims for said proceeds were presented by the estate of Esperanza J. Villanueva on the one hand and
by Mariano J. Villanueva on the other, which conflict was squarely submitted in the intestate proceedings of
Esperanza J. Villanueva pending in the Court of First Instance of Iloilo. From an order, dated February 26, 1947,
holding the estate of the insured is entitled to the insurance proceeds, to the exclusion of the beneficiary, Mariano
J. Villanueva, the latter has interposed the present appeal.
● Petitioner-claimant argues: Counsel for the beneficiary invokes the decision in Del Val vs. Del Val, 29 Phil., 534,
540, in which it was held that "the proceeds of an insurance policy belong exclusively to the beneficiary and not to
the estate of the person whose life was insured, and that such proceeds are the separate and individual property
of the beneficiary, and not of the heirs of the person whose life was insured." -> NOT CONTROLLING (this
argument is based from an old law - Commerce Code WHICH WAS repealed by the Insurance Code).
ISSUE: Was the TRIAL COURT at fault in denying MARIANO VILLANUEVA the insurance proceeds?
HELD: NO. The decedent died AFTER the lapse of the insurance period, thus excluding the beneficiary from obtaining the
proceeds.
●
●
●
●
●
"If a policy of insurance provides that the proceeds shall be payable to the assured, if he lives to a certain date,
and, in case of his death before that date, then they shall be payable to the beneficiary designated, the interest
of the beneficiary is a contingent one, and the benefit of the policy will only inure to such beneficiary in case the
assured dies before the end of the period designated in the policy." (Couch, Cyclopedia of Insurance Law, Vol. 2,
sec. 343. p. 1023.) "
The lower court committed no error. Under the policies, the insurer obligated itself to pay the insurance proceeds
(1) to the insured if the latter lived on the dates of maturity or (2) to the beneficiary if the insured died during the
continuance of the policies. The first contingency of course excludes the second, and vice versa.
As the insured Esperanza J. Villanueva was living on April 1, and March 31, 1943, the proceeds are
payable exclusively to her estate unless she had before her death otherwise assigned the matured
policies. HERE, THERE WAS NO ASSIGNMENT.
The beneficiary, Mariano J. Villanueva, could be entitled to said proceeds only in default of the first
contingency. To sustain the beneficiary's claim would be altogether eliminate from the policies the
condition that the insurer "agrees to pay . . . to the insured hereunder, if living".
"an insurance upon life may be made payable on the death of the death of the person, or on his surviving a
specified period, or otherwise, contingently on the continuance or cessation of life" (section 165), and that "a
policy of insurance upon life or health may pass by transfer, will, or succession, to any person, whether he has an
insurable interest or not, and such person may recover upon it whatever the insured might have recovered"
(section 166).
DISPOSITIVE: The appealed order is, therefore, hereby affirmed, and it is so ordered with costs against the appellant.