Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No.

L-l0874 January 28, 19 8

RU!"NO #. $N#RES, plaintiff-appellant, vs. T%E CRO&N L"!E "NSUR$NCE COMP$N', defendant-appellee. Esteban Aguinaldo and Santiago D. Andres for appellant. Nicodemus L. Dasig for appellee. RE'ES, J.(.L., J.) On April 2 , !"#2, Rufino $. Andres filed a co%plaint in the Court of &irst 'nstance of 'locos Norte a(ainst the Cro)n *ife 'nsurance Co%pan+ for the recover+ of the a%ount of P#, , as the face value of a ,oint 2 -+ear endo)%ent insurance polic+ issued in favor of the plaintiff Rufino $. Andres and his )ife -evera .. Andres on the !/th of &ebruar+, !"# , b+ said insurance co%pan+. On 0un 1, !"#!, Rufino Andres presented his death clai% as survivor-beneficiar+ of the deceased -evera .. Andres, )ho died Ma+ /, !"#!. Pa+%ent havin( been denied b+ the insurance co%pan+ on April 2 , !"#2, this case )as instituted. $efendant Co%pan+ filed its ans)er in due ti%e disclai%in( liabilit+ and settin( forth the special defense that the afore%entioned polic+ had alread+ lapsed. *ater, on March 2#, !"#2, the parties sub%itted the case for decision b+ the lo)er court upon a stipulation of facts, full+ 3uoted hereunder4 !. 5hat on October 2 , !"2", plaintiff and -evera .. Andres filed an application for insurance No. #/6,22/, )hich are %ar7ed as co%%on E8hibits 9!9 and 9l-A9, respectivel+: 2. 5hat on &ebruar+ !/, !"# , defendant isssued Cro)n *ife Polic+ No. #/6,22/ for the su% of P#, , in the na%e of Rufino $. Andres, plaintiff, and -evera .. Andres, )hich is hereto %ar7ed as co%%on E8hibit 929: /. 5hat the pre%iu%s are to be paid as called for in the polic+ E8hibit ;29, se%i-annuall+, and the a%ount of P!6#.!# for the first se%ester be(innin( Nove%ber 2#, !"2" to Ma+ 2#, !"# )as paid on Nove%ber 2#, !"2", )hich is hereb+ %ar7ed as co%%on E8hibit 9/9, and the pre%iu% li7e)ise in the su% of P!6#.!# for the second se%ester be(innin( Ma+ 2#, !"# to Nove%ber 2#, !"# , )as paid on 0une 22, !"# , as evidenced b+ co%%on E8hibit 9/-A9: and the pre%iu% for the third se%ester be(innin( Nove%ber 2#, !"# to Ma+ 2#, !"#! )as not paid: 2. 5hat on 0anuar+ 6, !"#!,the defendant, thru Mr. '.B. Melendres, )rote to Mr. and Mrs. Rufino $. Andres advisin( the% that the said Polic+ No. #/6,22/ lapsed on $ece%ber 2#, !"# and the a%ount overdue )as P!6#.!#, (ivin( the% a period of si8t+ <6 = da+s fro% the date of lapse to file an application for reinstate%ent, )hich letter is %ade as co%%on E8hibit 929:

#. 5hat on &ebruar+ !2, !"#!, the said Mr. '.B. Melendres, branch secretar+ of the defendant, )rote Mr. and Mrs. Rufino $. Andres, tellin( the latter that Polic+ No. #/6,22/ )as no lon(er in force and it lapsed on $ece%ber 2#, !"# , )hich letter is here)ith %ade as co%%on E8hibit 9#9: 6. 5hat in the %onth of &ebruar+, !"#!, plaintiff e8ecuted a -tate%ent of >ealth )hich is at the sa%e ti%e an Application for Reinstate%ent of the aforesaid polic+, )hich application is here)ith %ade as co%%on E8hibit 969 <Note4 E8hibit 969 is the reverse side of E8hibit 929=. and -evera .. Andres also e8ecuted in the %onth of &ebruar+, !"#!, an Application for Reinstate%ent, )hich Application for Reinstate%ent is %ade as co%%on E8hibit 919: 1. 5hat on &ebruar+ 2 , !"#!, plaintiff )rote a letter to the defendant and enclosed there)ith a %one+ order for P! , )hich letter )as received b+ the defendant on &ebruar+ 26, !"#!, )herein it is stated that the balance unpaid is the su% of P6#.!#, )hich letter is hereb+ %ade as co%%on E8hibit 9?9: ?. 5hat on April !2, !"#!, the said Mr. '.B. Melendres, as branch secretar+ for the defendant: )rote plaintiff advisin( hi% that the >o%e Office has approved the reinstate%ent of the lapsed polic+, sub,ect to the pa+%ent of P6#.!# due on Nove%ber, !"# pre%iu%, a duplicate ori(inal cop+ of the said letter is hereb+ %ade as co%%on E8hibit 9"9: ". 5hat on April 21, !"#!, said Mr. '.B. Melendres, branch secretar+, a(ain )rote the plaintiff re3uestin( the re%ittance of the balance of P6#.!# due on the se%i-annual pre%iu% for Nove%ber, !"#O, and upon receipt of the said a%ount, there )ill be sent to hi% the Certificate of Reinstate%ent of the polic+, a duplicate ori(inal cop+ of the said letter is hereto %ade as co%%on E8hibit 9! 9: ! . 5hat on Ma+ #, !"#!, plaintiff sent a letter to the defendant and enclosed there)ith a Mone+ Order in the a%ount of P6#. for the balance due on the Cro)n *ife Polic+ No. #/6,22/, )hich letter has been received in the office of the defendant on Ma+ !!, !"#!, )hich letter is here)ith %ade as co%%on E8hibit 9!!9: !!. 5hat on Ma+ !#, !"#!, said Mr. '.B. Melendres )rote a letter to Mr. and Mrs. Rufino $. Andres, enclosin( an Official Receipt for the receipt of P!6#.!#, )hich Official Receipt is hereb+ %ade as co%%on E8hibit 9!29, and also enclosed there)ith a Certificate of Reinstate%ent dated April 2, !"#!, )hich is here)ith %ade as co%%on E8hibit 9!/9 and the duplicate ori(inal cop+ of the aforesaid letter dated Ma+ !#, !"#! is here)ith %ade as co%%on E8hibit 9!29, and pre%iu% notice addressed to Mr. and Mrs. Rufino $. Andres, )herein it is sho)n that the se%i-annual pre%iu% in the su% of P!6#.!# on the said polic+ )ould be due on Ma+ !#, !"#!, )hich pre%iu% notice is her)ith %ade as co%%on E8hibit 9!2-A9: !2. 5hat on 0une 1, !"#!, plaintiff presented his $eath Clai% as survivor-beneficiar+ of the deceased -evera .. Andres )hich has been received in the office of the defendant on 0une !!, !"#!, )hich letter is here)ith %ade as co%%on E8hibit 9!#9, and there )ere therein enclosed in the said letter an affidavit dated 0une 6, !"#! of the plaintiff, )hich is here)ith %ade as co%%on E8hibit 9!#-A9, and a Certificate of $eath dated Ma+ 2", !"#!, issued b+ the *ocal Civil Re(istrar of the %unicipalit+ of -arrat, )herein it is sho)n that Mrs. -evera .. Andres died on Ma+ /, !"#! of d+stocia, second de(ree, contracted pelvis, )hich Certificate of $eath is here)ith %ade as co%%on E8hibit 9!#-B9, and a %edical certificate of $r. R. de la Cuesta, senior resident ph+sician of the 'locos Norte Provincial >ospital, dated Ma+ 2 ,

!"#!, sho)in( the cause of death of the said deceased, Mrs. -evera .. Andres, )hich %edical certificate is here)ith %ade as co%%on E8hibit 9!#-C9: !/. 5hat on 0une / , !"#!, Mr. '.B. Melendres )rote to plaintiff statin( defendant;s reasons for its refusal to pa+ the death clai% of the plaintiff )hich letter is here)ith %ade as co%%on E8hibit 9!69, in )hich there )as therein enclosed a $eath Clai% $ischar(e to be si(ned b+ the plaintiff but the plaintiff refused to si(n, )hich $eath Clai% $ischar(e is here)ith %ade as co%%on E8hibit 9!6-A9: !2. 5hat on Nove%ber 2/, !"#!, the said Mr. '.B. Melendres )rote plaintiff enclosin( there)ith a National Cit+ Ban7 of Ne) @or7 Chec7 No. $-!!#/#6 for P!6#. pa+able to plaintiff, dated 0une 2!, !"#!, an ori(inal duplicate cop+ of )hich is here)ith %ade as co%%on E8hibit 9!19: !#. 5hat on $ece%ber !, !"#!, the plaintiff )rote defendant co%pan+ and enclosed there)ith the aforesaid National Cit+ Ban7 of Ne) @or7 Chec7 No. $-!!#/#6 dated 0une 2!, !"#!, )hich letter is here)ith %ade as Co%%on E8hibit 9!?9, and the chec7 returned to the defendant co%pan+ as E8hibit 9!?-A9: !6. 5hat )ith the approval of this stipulation of facts, the parties hereb+ sub%it the sa%e and do hereb+ re3uest the >onorable Court to (ive the% t)ent+ <2 = da+s )ithin )hich to file si%ultaneousl+ their correspondin( %e%oranda and another fifteen <!#= da+s for a repl+ %e%orandu%.9 <Rec. App., pp. !1-22=. On Au(ust #, !"#2, 0ud(e 0ulio Ailla%or rendered decision absolvin( the defendant fro% an+ liabilit+ on the (round that the polic+ havin( lapsed, it )as not reinstated at the ti%e the plaintiff;s )ife died. Not satisfied )ith the decision, plaintiff appealed to the Court of Appeals, but the appeal )as later certified to this Court, for there is no 3uestion of fact involved therein. As has been correctl+ stated b+ the lo)er court, the resolution of the issues in this case centers on )hether or not polic+ No. #/622/ <E8hibit 929= )hich has been in a state of lapse before Ma+ /, !"#!, has been validl+ and co%pletel+ reinstated after said date. 'n other )ords, )as there a perfected contract of reinstate%ent after the polic+ lapsed due to non-pa+%ent of pre%iu%sB 5he stipulation of facts and acco%pan+in( e8hibits render it undisputable that the ori(inal polic+ No. #/622/ lapsed for non-pa+%ent of pre%iu%s on $ece%ber 26, !"# , upon e8piration of the custo%ar+ /!-da+ period of (race. 5he subse3uent reinstate%ent of the polic+ )as provided for in the contract itself in the follo)in( ter%s4 'f this polic+ lapses, it %a+ be reinstated upon application %ade )ithin three +ears fro% the date of lapse, and upon production of evidence of the (ood health of the in,ured <and also of the Beneficiar+, if the rate of pre%iu% depends upon the a(e of the Beneficiar+=, and such other evidence of insurabilit+ at the date of application for reinstate%ent as )ould then satisf+ the Co%pan+ to issue a ne) Polic+ on the sa%e ter%s as this Polic+, and upon pa+%ent of all overdue pre%iu%s and other indebtedness in respect of this Polic+, to(ether )ith interest at si8 per cent, co%pounded annuall+, and provided also that no chan(e has ta7en place in such (ood health and insurabilit+ subse3uent to the date of such application and before this Polic+ is reinstated. As stated b+ the lo)er court, the conditions set forth in the polic+ for reinstate%ent are the follo)in(4 <a= application shall be %ade )ithin three +ears fro% the date of lapse: <b= there should be a production of evidence of the (ood health of the insured4 <c= if the rate of pre%iu% depends upon the

a(e of the Beneficiar+, there should li7e)ise be a production of evidence of his or her (ood health: <d= there should be presented such other evidence of insurabilit+ at the date of application for reinstate%ent: <e= there should be no chan(e )hich has ta7en place in such (ood health and insurabilit+ subse3uent to the date of such application and before the polic+ is reinstated: and <f= all overdue pre%iu%s and other indebtedness in respect of the polic+, to(ether )ith interest at si8 per cent, co%pounded annuall+, should first be paid. 5he plaintiff-appellant did not co%pl+ )ith the last condition: for he onl+ paid P! <on account of the over due se%i-annual pre%iu% of P!6#.!#= on &ebruar+ 2 , !"#!, before his )ife;s death <-tipulation, par. 1= : and, despite the Co%pan+;s re%inders on April !2 and 21, he re%itted the balance of P6# on Ma+ #, !"#! <received b+ the Co%pan+;s a(enc+ on Ma+ !!=, t)o da+s after his )ife died. On the face of such facts, the Co%pan+ had the ri(ht to treat the contract as lapsed and refuse pa+%ent of the polic+. Appellant, ho)ever, contends that the condition re(ardin( pa+%ent of the pre%iu% )as )aived b+ the insurance Co%pan+ b+ its letters <si(ned b+ '. B. Melendres, cashier= E8hibits 2 and # )herein the Co%pan+ %anifested to appellant4 'f +ou can not pa+ the full a%ount i%%ediatel+, send as lar(e an a%ount as possible and advise us ho) soon +ou e8pect to be able to pa+ the balance. Ever+ consideration )ill be (iven to +our re3uest consistent )ith the co%pan+;s re(ulations <E8hibit 2=. 'f +ou are unable to cover this a%ount in full, send us as bi( an a%ount as +ou are able and )e )ill )or7 out an ad,ust%ent %ost beneficial to +ou. <E8hibit #= Ce see nothin( in these e8pressions that )ould indicate an intention on the insurer;s part to )aive the full pa+%ent of the overdue pre%iu% as prere3uisite to the reinstate%ent of the lapsed polic+, considerin( the )ell settled rule that a )aiver %ust be clear and positive, and intent to )aive sho)n clearl+ and convincin(l+ <&ernandeD vs. -ebido, 1 Phil. !#!, !#": *an( vs. -heriff E 2" Off. .aD. //2/, //2": 0ocson vs. Capitol -ubdivision, 'nc. ..R. *-6#1/, &ebruar+ 2?, !"##=. 5he pro%ise to (ive plaintiff;s case ever+ consideration does not i%port an+ decision to renounce the insurer;s ri(hts: and as to the 9)or7in( out of an ad,ust%ent %ost beneficial9 to the insured, the proposal is obviousl+ so va(ue and indefinite as to re3uire further ne(otiations bet)een the parties, for their criteria %i(ht differ as to )hat )ould be the %ost beneficial arran(e%ent. Fpon the other hand, the subse3uent letters of the insurance Co%pan+ <E8hibits " and ! = patentl+ indicated that the Co%pan+ insisted on the full pa+%ent of the pre%iu% before the polic+ )as reinstated. Ce ta7e this opportunit+ of advisin( +ou that our >o%e Office has approved the reinstate%ent of +our lapsel polic+ subject to the payment of the balance of P6#.!# due on +our Nove%ber !"# pre%iu%. Kindly remitthis a%ount in order that you may once more enjoy the benefits of insurance protection9 <E8ibit ", April !2, !"#!=. We may now reinstate +our polic+ if you will indly remit to us the balance of P6#.!# due on +our se%i-annual pre%iu% for Nove%ber, !"# . Please send us this a%ount b+ return %ail and upon its receipt )e )ill in turn send the Certificate of Reinstate%ent of +our polic+, thus rendering it once again in full force and effect, <E8hibit ! , April 2!, !"#!= <E%phasis supplied=.

Clearl+ the Co%pan+ did not consider the partial pa+%ent as sufficient consideration for the reinstate%ent. Appellant;s failure to re%it the balance before the death of his )ife operated to deprive hi% of an+ ri(ht to )aive the polic+ and recover the face value thereof. 5his Court, in the case of 0a%es Mc.uire vs. 5he Manufacturer;s *ife 'nsurance Co. <?1 Phil,. /1 , 2? Off. .aD. G!H, !!2=, said. 5he stipulation in a life insurance polic+ (ivin( the insured the privile(e to reinstate it upon )ritten application does not (ive the insured absolute ri(ht to such reinstate%ent b+ the %ere filin( of an application. 5he Co%pan+ has the ri(ht to den+ the reinstate%ent if it is not satisfied as to the insurabilit+ of the insured and if the latter does no pa+ all overdue pre%iu% and all other indebtedness to the Co%pan+. After the death of the insured the insurance Co%pan+ cannot be co%pelled to entertain an application for reinstate%ent of the polic+ because the conditions precedent to reinstate%ent can no lon(er be deter%ined and satisfied. Cherefore, findin( no error in the ,ud(%ent appealed fro%, )e hereb+ affir% the sa%e, )ith costs a(ainst appellant. -o ordered. !eng"on# $adilla# %ontemayor# &eyes# A.# !autista Angelo# Labrador# 'oncepcion# Endencia# and (eli)# **.#concur.