RAFAEL ENRIQUEZ, as administrator of the estate of the late

Joaquin
Ma.
Herrer, plaintiff-appellant,
vs.
SUN LIFE ASSURANCE COMPANY OF CANADA, defendantappellee.
This is an action brought by the plaintiff ad administrator of the
estate of the late Joaquin Ma. Herrer to recover from the defendant
life insurance company the sum of pesos 6,000 paid by the
deceased for a life annuity. The trial court gave judgment for the
defendant. Plaintiff appeals.
November 29, 1920
Lessons Applicable: Perfection (Insurance)
FACTS:

September 24, 1917: Joaquin Herrer made application to the

Sun Life Assurance Company of Canada through its office in
Manila for a life annuity

2 days later: he paid P6,000 to the manager of the company's

Manila office and was given a receipt

according to the provisional receipt, 3 things had to be

accomplished by the insurance company before there was a
contract:

(1) There had to be a medical examination of the

applicant; -check

(2) there had to be approval of the application by the

head office of the company; and - check

(3) this approval had in some way to be communicated

by the company to the applicant - ?

November 26, 1917: The head office at Montreal, Canada gave

notice of acceptance by cable to Manila but this was not mailed

December 4, 1917: policy was issued at Montreal

December 18, 1917: attorney Aurelio A. Torres wrote to the

Manila office of the company stating that Herrer desired to
withdraw his application

December 19, 1917: local office replied to Mr. Torres, stating

that the policy had been issued, and called attention to the
notification of November 26, 1917

December 21, 1917 morning: received by Mr. Torres

December 20, 1917: Mr. Herrer died

Rafael Enriquez, as administrator of the estate of the late

Joaquin Ma. Herrer filed to recover from Sun Life Assurance
Company of Canada through its office in Manila for a life annuity

RTC: favored Sun Life Insurance

ISSUE: W/N Mr. Herrera received notice of acceptance of his
application thereby perfecting his life annuity

HELD: NO. Judgment is reversed, and the Enriquez shall have and
recover from the Sun Life the sum of P6,000 with legal interest from
November 20, 1918, until paid, without special finding as to costs in
either instance. So ordered.

Civil Code
Art. 1319 (formerly Art.1262)
Art. 1319. Consent is manifested by the meeting of the offer and the
acceptance upon the thing and the cause which are to constitute the
contract. The offer must be certain and the acceptance absolute. A qualified
acceptance
constitutes
a
counter-offer.
Acceptance made by letter or telegram does not bind the offerer except from
the time it came to his knowledge. The contract, in such a case, is presumed
to have been entered into in the place where the offer was made.

not perfected because it has not been proved satisfactorily

that the acceptance of the application ever came to the
knowledge of the applicant
In resume, therefore, the law applicable to the case is found to be
the second paragraph of article 1262 of the Civil Code providing that
an acceptance made by letter shall not bind the person making the
offer except from the time it came to his knowledge. The pertinent
fact is, that according to the provisional receipt, three things had to
be accomplished by the insurance company before there was a
contract: (1) There had to be a medical examination of the
applicant; (2) there had to be approval of the application by the
head office of the company; and (3) this approval had in some way
to be communicated by the company to the applicant. The further
admitted facts are that the head office in Montreal did accept the
application, did cable the Manila office to that effect, did actually
issue the policy and did, through its agent in Manila, actually write
the letter of notification and place it in the usual channels for
transmission to the addressee. The fact as to the letter of
notification thus fails to concur with the essential elements of the
general rule pertaining to the mailing and delivery of mail matter as
announced by the American courts, namely, when a letter or other

mail matter is addressed and mailed with postage prepaid there is a

rebuttable presumption of fact that it was received by the addressee
as soon as it could have been transmitted to him in the ordinary
course of the mails. But if any one of these elemental facts fails to
appear, it is fatal to the presumption. For instance, a letter will not
be presumed to have been received by the addressee unless it is
shown that it was deposited in the post-office, properly addressed
and stamped.
NOTE: Life annuity is the opposite of a life insurance. In life annuity,
a big amount is given to the insurance company, and if after a
certain period of time the insured is stil living, he is entitled to
regular smaller amounts for the rest of his life. Examples of Life
annuity are pensions. Life Insurance on the other hand, the insured
during the period of the coverage makes small regular payments
and upon his death, the insurer pays a big amount to his
beneficiaries.

NERISSA Z. PEREZ, petitioner, vs. THE COURT OF APPEALS

(Ninth Division) and RAY C. PEREZ, respondents.

Perez vs. CA, GR No. 118870, March 29, 1996

(Special Proceedings Custody: A child under seven years shall not

be separated from his mother)
Facts: Respondent father, a doctor of medicine and petitioner
mother, a registered nurse working in the US are married couples
who are separated in fact with only one child.
Petitioner filed a petition for habeas corpus asking respondent to
surrender the custody of their son. The RTC issued an Order
awarding custody of the one-year old child to his mother, citing the
second paragraph of Article 213 of the Family Code.
Upon appeal by the father, the Court of Appeals reversed the trial
courts order and awarded custody of the boy to him ruling that
there were enough reasons to deny petitioner custody over the child
even under seven years old. It held that granting custody to the
boys father would be for the childs best interest and welfare.

Article 213, par 2, provides in case of separation of parents that no

child under 7 years of age shall be separated from the mother,
unless the court finds compelling reasons to order otherwise.
Rule 99, Section 6 of the Revised Rules of Court also states that No
child under seven years of age shall be separated from the mother,
unless the court finds there are compelling reasons therefore.
Issue: WON custody of the child is to be given to the father.
Held: No. The provisions of the law clearly mandate that a child
under seven years of age shall not be separated from his mother
unless the court finds compelling reasons to order otherwise. The
use of the word shall in Article 213 of the Family Code and Rule
99, Sec 6 of the Revised Rules of Court connotes a mandatory
character.
Couples who are separated in fact are covered within the term
separation.
The Family Code in reverting to the provision of the Civil Code that a
child below seven years old shall not be separated from the mother
(Article 363), has expressly repealed the earlier Article 17, par 3 of
the Child and youth Welfare Code which reduced the childs age to 5
years.
When the parents of the child are separated, Article 213 of the
Family Code is the applicable law. It provides:
ART. 213. In case of separation of the parents, parental authority
shall be exercised by the parent designated by the Court. The Court
shall take into account all relevant considerations, especially the
choice of the child over seven years of age, unless the parent
chosen is unfit.
No child under seven years of age shall be separated from the
mother, unless the court finds compelling reasons to order
otherwise. (Italics supplied)
Since the Code does not qualify the word separation to mean
legal separation decreed by a court, couples who are separated in
fact, such as petitioner and private respondent, are covered within
its terms.8
The Revised Rules of Court also contains a similar provision. Rule
99, Section 6 (Adoption and Custody of Minors) provides:
SEC. 6. Proceedings as to child whose parents are separated.
Appeal. - When husband and wife are divorced or living separately

and apart from each other, and the questions as to the care,
custody, and control of a child or children of their marriage is
brought before a Court of First Instance by petition or as an incident
to any other proceeding, the court, upon hearing the testimony as
may be pertinent, shall award the care, custody, and control of each
such child as will be for its best interest, permitting the child to
choose which parent it prefers to live with if it be over ten years of
age, unless the parent chosen be unfit to take charge of the child by
reason of moral depravity, habitual drunkenness, incapacity, or
poverty x x x. No child under seven years of age shall be separated
from its mother, unless the court finds there are compelling reasons
therefor. (Italics supplied)
The provisions of law quoted above clearly mandate that a child
under seven years of age shall not be separated from his mother
unless the court finds compelling reasons to order otherwise. The
use of the word shall in Article 213 of the Family Code and Rule 99,
Section 6 of the Revised Rules of Court connotes a mandatory
character. In the case of Lacson v. San Jose-Lacson,9 the Court
declared:

Lim v Sunlife G.R. No. L-15774 November 29, 1920

J. Malcolm
Facts:
Luis Lim of Zamboanga applied for a Sun Life policy for Php 5,000.
He designated his wife, Pilar, as beneficiary. The first premium of
P433 was paid by Lim, then the company issued a "provisional
policy." Lim died after the issuance of the provisional policy but
before approval of the application.
Pilar brought an action to recover from Sun Life the sum of P5,000,
the amount named in the provisional policy. She lost in the trial
court hence this appeal.
The "provisional policy" reads as follows:
The above-mentioned life is to be assured in accordance with the
terms and conditions contained or inserted by the Company in the
policy which may be granted by it in this particular case for four
months only from the date of the application, provided that the
Company shall confirm this agreement by issuing a policy on said
application when the same shall be submitted to the Head Office in
Montreal. Should the Company not issue such a policy, then this
agreement shall be null and void ab initio, and the Company shall be

held not to have been on the risk at all, but in such case the amount
herein acknowledged shall be returned.
Issue: WON there was a perfected contract of insurance
Held: No. Petition dismissed.
Ratio:
The policy for four months is expressly made subjected to the
affirmative condition that "the company shall confirm this
agreement by issuing a policy on said application when the same
shall be submitted to the head office in Montreal."
Should the company not issue such a policy, then this agreement
shall be null and void ab initio, and the company shall be held not to
have been on the risk." This means that the agreement should not
go into effect until the home office of the company should confirm it
by issuing a policy. The provisional policy amounts to nothing but an
acknowledgment on behalf of the company, that it has received
from the person named therein the sum of money agreed upon as
the first year's premium upon a policy to be issued upon the
application, if the application is accepted by the company.
There can be no contract of insurance unless the minds of the
parties have met in agreement. In this case, the contract of
insurance was not consummated by the parties.
The general rule concerning the agent's receipt pending approval or
issuance of policy is in several points, according to Joyce:
2. Where an agreement is made between the applicant and the
agent whether by signing an application containing such condition,
or otherwise, that no liability shall attach until the principal
approves the risk and a receipt is given buy the agent, such
acceptance is merely conditional, and it subordinated to the act of
the company in approving or rejecting; so in life insurance a
"binding slip" or "binding receipt" does not insure of itself.
The court held that this second point applied to the case.
American jurisprudence tells us of such examples.
Steinle vs. New York Life Insurance Co.- the amount of the first
premium had been paid to an insurance agent and a receipt was
given. The paper declared that if the application was accepted by
the company, the insurance shall take effect from the date of the
application but that if the application was not accepted, the money
shall be returned. The court held that there was no perfection of the
contract.
Cooksey vs. Mutual Life Insurance Co.- the person applying for the
life insurance paid and amount equal to the first premium, but the
application and the receipt for the money paid, stipulated that the

insurance was to become effective only when the application was

approved and the policy issued. There was also no perfection.
A binding receipt is a custom where temporary insurance pending
the consideration of the application was given until the policy be
issued or the application rejected, and such contracts are upheld
and enforced when the applicant dies before the issuance of a policy
or final rejection of the application.
However, there was no perfected contract because of the clause in
the application and the receipt stipulate expressly that the
insurance shall become effective only when the "application shall be
approved and the policy duly signed by the secretary at the head
office of the company and issued." The premium of 433 must be
returned.

Musngi
v.
West
Representation

Coast

Life

Assurance

Co.-

False

61 PHIL 864
Facts:
The plaintiffs, as beneficiaries, brought suit against the defendant to
recover the value of two life insurance policies. The defendant
appealed from a judgment sentencing it to pay the plaintiffs the
amount of said policies, and the costs.
The principal facts of the case are embodied in the following written
stipulation entered into by the parties:
1. That Arsenio T. Garcia was insured by the defendant
company in the sum of P5,000 as evidenced by Policy No.
129454 effective as of July 25, 1931, hereby attached and
marked as Exhibit A;
2. That the said Arsenio T. Garcia was again insured by the
defendant company in the sum of P10,000 effective as of
October 20, 1931, as evidenced by Policy No. 130381 hereby
attached and marked as Exhibit B;
3. That the two policies aforementioned were valid and
subsisting at the time of the death of the insured on
December 30, 1932; the fact of said death is evidenced by the
accompanying death certificate issued by the Civil Register of
Pasay, Rizal, which is marked as Exhibit C;

4. That the plaintiffs herein are the beneficiaries in said

policies, Segundina Musgi of Policy No. 129454, and
Buenaventura Garcia of Policy No. 130381;
5. That demand was made upon the defendant company for
the payment of the two policies above referred to, but the
defendant company refused to pay on the grounds stated in
the answer.
The two policies were issued upon applications filed by the insured
on July 20, 1931 and October 15, of the same year, respectively. In
both applications, the insured had to answer inquiries as to his state
of health and that of his family, which he did voluntarily. In each of
the said applications the following question was asked: "1. What
physician or practitioner or any other person not named above have
you consulted or been treated by, and for what illness, or ailment?
(If none, so state.)" In the first application, the insured answered
"None", and in the second, "No". These answers of the insured as
well as his other statements contained in his applications were one
of the causes or considerations for the issuance of the policies, and
they so positively appear therein. After the death of the insured and
as a result of the demand made by the beneficiaries upon the
defendant to pay the value of the policies, the latter discovered that
the aforementioned answers were false and fraudulent, because the
truth was that the insured, before answering and signing the
applications and before the issuance of the policies, had been
treated in the General Hospital by a lady physician for different
ailments.
> May 13 and 19, 1929, the insured had entered the General
Hospital in Manila, and was treated by Doctor Pilar V. Cruz for peptic
ulcer and chronic catarrhal nasopharyngitis; on August 5, 1930, he
entered the same hospital and was treated by the same physician
for chronic pyelocystitis and for incipient pulmonary tuberculosis; on
the 13th of the same month he returned to the hospital and was
treated by the same physician for chronic suppurative pyelocystitis
and for chronic bronchitis; on the 20th of the same month he again
entered the hospital and was treated by the same doctor for acute
tracheo-bronchitis and chronic suppurative pyelocystitis; on the
27th of the same month he again entered the same hospital and
was treated for the same ailments; on December 11, 1930, he again
entered the hospital and was treated for the same ailments; on the
18th of the same month, he again entered the hospital and was
treated for the same ailments; on the 28th of the same month he
again entered the hospital and was treated for the same ailments,
and, finally, on January 11, 1931, he again entered the hospital and
was treated by the same doctor for the same ailments.

> Arsenio Garcia was insured by West Coast twice in 1931. In both
policies, he was asked to answer the question: what physician or
practitioners have you consulted or been treated by, and for what
illness or ailment?
> In both policies, he answered in the negative. It turned out that
from 1929 to 1939, he went to see several physicians for a number
of ailments. So when he died in 1942, the company refused to pay
the proceeds of the insurance.

Issue:
Whether or not the answer given by Arsenio in the policies justifies
the companys refusal to pay?

Held:
YES.
Aresenio knew that he was suffering from a number of ailments, yet,
he concealed this. Such concealment and his false statements
constituted fraud, because the insurance company by reasons of
such statement accepted the risk which it would otherwise have
rejected.

Insurance Case Digest: Gulf Resorts Inc. V. Philippine Charter Insurance

Corp. (2005)
G.R. No. 156167 May 16, 2005
Lessons Applicable: Stipulations Cannot Be Segregated (Insurance)

FACTS:

Gulf Resorts, Inc at Agoo, La Union was insured with American

Home Assurance Company which includes loss or damage to
shock to any of the property insured by this Policy occasioned by
or through or in consequence of earthquake

July 16, 1990: an earthquake struck Central Luzon and

Northern Luzon so the properties and 2 swimming pools in its
Agoo Playa Resort were damaged

August 23, 1990: Gulf's claim was denied on the ground that
its insurance policy only afforded earthquake shock coverage to
the two swimming pools of the resort

Petitioner contends that pursuant to this rider, no

qualifications were placed on the scope of the earthquake shock
coverage. Thus, the policy extended earthquake shock coverage
to all of the insured properties.

RTC: Favored American Home - endorsement rider means that

only the two swimming pools were insured against earthquake
shock

CA: affirmed RTC

ISSUE: W/N Gulf can claim for its properties aside from the 2
swimming pools

HELD: YES. Affirmed.

It is basic that all the provisions of the insurance policy should

be examined and interpreted in consonance with each other.

All its parts are reflective of the true intent of the

parties.
Insurance Code
Section 2(1)
contract of insurance as an agreement whereby one undertakes for a
consideration to indemnify another against loss, damage or liability arising
from an unknown or contingent event

An insurance premium is the consideration paid an insurer for

undertaking to indemnify the insured against a specified peril.

In the subject policy, no premium payments were made

with regard to earthquake shock coverage, except on the two
swimming pools.
Gulf Resorts Inc. vs. Philippine Charter
Corporation [G.R. No. 156167 May 16, 2005]

Insurance

Facts: Gulf Resorts is the owner of the Plaza Resort situated at Agoo,
La Union and had its properties in said resort insured originally with
the American Home Assurance Company (AHAC). In the first 4
policies issued, the risks of loss from earthquake shock was
extended only to petitioners two swimming pools. Gulf

Resorts agreed to insure with Phil Charter the properties covered by

the AHAC policy provided that the policy wording and rates in said
policy be copied in the policy to be issued by Phil Charter. Phil
Charter issued Policy No. 31944 to Gulf Resorts covering the period
of March 14, 1990 to March 14, 1991 forP10,700,600.00 for a total
premium of P45,159.92. the break-down of premiums shows that
Gulf Resorts paid only P393.00 as premium against earthquake
shock(ES). In Policy No. 31944 issued by defendant, the shock
endorsement provided that In consideration of the payment by the
insured to the company of the sum included additional premium the
Company agrees, notwithstanding what is stated in the printed
conditions of this policy due to the contrary, that this insurance
covers loss or damage to shock to any of the property insured by
this Policy occasioned by or through or inconsequence of earthquake
(Exhs. "1-D", "2-D", "3-A","4-B", "5-A", "6-D" and "7-C"). In Exhibit
"7-C" the word" included" above the underlined portion was deleted.
On July 16, 1990 an earthquake struck Central Luzon and Northern
Luzon and plaintiffs properties covered by Policy No. 31944 issued
by defendant, including the two swimming pools in its Agoo Playa
Resort were damaged. Petitioner advised respondent that it would
be making a claim under its Insurance Policy 31944 for damages on
its properties. Respondent denied petitioners claim on
the ground that its insurance policy only afforded earthquake shock
coverage to the two swimming pools of the resort. The trial
court ruled in favor of respondent. In its ruling, the schedule clearly
shows that petitioner paid only a premium of P393.00 against the
peril of earthquake shock, the same premium it had paid against
earthquake shock only on the two swimming pools in all the policies
issued by AHAC.
Issue: Whether or not the policy covers only the two swimming pools
owned by Gulf Resorts and does not extend to all properties
damaged therein
Held: YES. All the provisions and riders taken and interpreted
together, indubitably show the intention of the parties to extend
earthquake shock coverage to the two swimming pools only. An
insurance premium is the consideration paid an insurer for
undertaking to indemnify the insured against a specified peril. In
fire, casualty and marine insurance, the premium becomes a debt
as soon as the risk attaches. In the subject policy, no premium
payments were made with regard to earthquake shock coverage
except on the two swimming pools. There is no mention of any
premium payable for the other resort properties with regard to
earthquake shock. This is consistent with the history of petitioners
insurance policies with AHAC.

Philamcare v CA G.R. No. 125678. March 18, 2002

J. Ynares-Santiago
Facts:
Ernani Trinos applied for a health care coverage with Philam. He
answered no to a question asking if he or his family members were
treated to heart trouble, asthma, diabetes, etc.
The application was approved for 1 year. He was also given
hospitalization benefits and out-patient benefits. After the period
expired, he was given an expanded coverage for Php 75,000. During
the period, he suffered from heart attack and was confined at MMC.
The wife tried to claim the benefits but the petitioner denied it
saying that he concealed his medical history by answering no to the
aforementioned question. She had to pay for the hospital bills
amounting to 76,000. Her husband subsequently passed away. She
filed a case in the trial court for the collection of the amount plus
damages. She was awarded 76,000 for the bills and 40,000 for
damages. The CA affirmed but deleted awards for damages. Hence,
this appeal.
Issue: WON a health care agreement is not an insurance contract;
hence the incontestability clause under the Insurance Code does
not apply.
Held: No. Petition dismissed.
Ratio:
Petitioner claimed that it granted benefits only when the insured is
alive during the one-year duration. It contended that there was no
indemnification unlike in insurance contracts. It supported this claim
by saying that it is a health maintenance organization covered by
the DOH and not the Insurance Commission. Lastly, it claimed that
the Incontestability clause didnt apply because two-year and not
one-year effectivity periods were required.
Section 2 (1) of the Insurance Code defines a contract of insurance
as an agreement whereby one undertakes for a consideration to
indemnify another against loss, damage or liability arising from an
unknown or contingent event.
Section 3 states: every person has an insurable interest in the life
and health:
(1)
of himself, of his spouse and of his children.
In this case, the husbands health was the insurable interest. The
health care agreement was in the nature of non-life insurance,
which is primarily a contract of indemnity. The provider must pay for
the medical expenses resulting from sickness or injury. While

petitioner contended that the husband concealed materialfact of his

sickness, the contract stated that:
that any physician is, by these presents, expressly authorized to
disclose or give testimony at anytime relative to any information
acquired by him in his professional capacity upon any question
affecting the eligibility for health care coverage of the Proposed
Members.
This meant that the petitioners required him to sign authorization to
furnish reports about his medical condition. The contract also
authorized Philam to inquire directly to his medical history.
Hence, the contention of concealment isnt valid.
They cant also invoke the Invalidation of agreement clause where
failure of the insured to disclose information was a grounds for
revocation simply because the answer assailed by the company was
the heart condition question based on the insureds opinion. He
wasnt a medical doctor, so he cant accurately gauge his condition.
Henrick v Fire- in such case the insurer is not justified in relying
upon such statement, but is obligated to make further inquiry.
Fraudulent intent must be proven to rescind the contract. This was
incumbent upon the provider.
Having assumed a responsibility under the agreement, petitioner is
bound to answer the same to the extent agreed upon. In the end,
the liability of the health care provider attaches once the member is
hospitalized for the disease or injury covered by the agreement or
whenever he avails of the covered benefits which he has prepaid.
Section 27 of the Insurance Code- a concealment entitles the
injured party to rescind a contract of insurance.
As to cancellation procedure- Cancellation requires certain
conditions:
1.
Prior notice of cancellation to insured;
2.
Notice must be based on the occurrence after effective date
of the policy of one or more of the grounds mentioned;
3.
Must be in writing, mailed or delivered to the insured at the
address shown in the policy;
4.
Must state the grounds relied upon provided in Section 64 of
the Insurance Code and upon request of insured, to furnish facts on
which cancellation is based
None were fulfilled by the provider.
As to incontestability- The trial court said that under the title Claim
procedures of expenses, the defendant Philamcare Health Systems
Inc. had twelve months from the date of issuance of the Agreement
within which to contest the membership of the patient if he had
previous ailment of asthma, and six months from the issuance of the
agreement if the patient was sick of diabetes or hypertension. The
periods having expired, the defense of concealment or
misrepresentation no longer lie.

Insular v Ebrado G.R. No. L-44059 October 28, 1977

Facts:
J. Martin:
Cristor Ebrado was issued by The Life Assurance Co., Ltd., a policy for
P5,882.00 with a rider for Accidental Death. He designated Carponia T.
Ebrado as the revocable beneficiary in his policy. He referred to her as his
wife.
Cristor was killed when he was hit by a failing branch of a tree. Insular Life
was made liable to pay the coverage in the total amount of P11,745.73,
representing the face value of the policy in the amount of P5,882.00 plus the
additional benefits for accidental death.
Carponia T. Ebrado filed with the insurer a claim for the proceeds as the
designated beneficiary therein, although she admited that she and the insured
were merely living as husband and wife without the benefit of marriage.
Pascuala Vda. de Ebrado also filed her claim as the widow of the deceased
insured. She asserts that she is the one entitled to the insurance proceeds.
Insular commenced an action for Interpleader before the trial court as to who
should be given the proceeds. The court declared Carponia as disqualified.
Issue: WON a common-law wife named as beneficiary in the life insurance
policy of a legally married man can claim the proceeds in case of death of the
latter?
Held: No. Petition
Ratio:
Section 50 of the Insurance Act which 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.
When not otherwise specifically provided for by the Insurance Law, the
contract of life insurance is governed by the general rules of the civil law
regulating contracts. And under Article 2012 of the same Code, any person
who is forbidden from receiving any donation under Article 739 cannot be
named beneficiary of a fife insurance policy by the person who cannot make a
donation to him. Common-law spouses are barred from receiving donations
from each other.
Article 739 provides that void donations are those made between persons
who were guilty of adultery or concubinage at the time of donation.

There is every reason to hold that the bar in donations between legitimate
spouses and those between illegitimate ones should be enforced in life
insurance policies since the same are based on similar consideration. So long
as marriage remains the threshold of family laws, reason and morality dictate
that the impediments imposed upon married couple should likewise be
imposed upon extra-marital relationship.
A conviction for adultery or concubinage isnt required exacted before the
disabilities mentioned in Article 739 may effectuate. The article says that in the
case referred to in No. 1, the action for declaration of nullity may be brought
by the spouse of the donor or donee; and the guilty of the donee may be
proved by preponderance of evidence in the same action.
The underscored clause neatly conveys that no criminal conviction for the
offense is a condition precedent. The law plainly states that the guilt of the
party may be proved in the same acting for declaration of nullity of donation.
And, it would be sufficient if evidence preponderates.
The insured was married to Pascuala Ebrado with whom she has six
legitimate children. He was also living in with his common-law wife with whom
he has two children.
Zenith Insurance Corporation v. The Insurance CommissionInsurable Interest
87 OG 6249

Facts:
> Zenith entered into an insurance contract, denominated as
Equipment Floater Policy covering a Kato Bachoe including its
accessories and appurtenances thereof, from loss of damage.
Complainant paid the stipulated premiums therefore.
> Within the period of effectivity of the policy, the two pieces of
hydraulic wheel gear pumps, which are considered appurtenances
and/or parts attached to and/or installed in the Kato BAchoe were
lost, stolen and/or illegally detached by unknown thieves or
malefactors
> Despite repeated assurances by Zeniths soliciting agent, it
refused and failed to settle and pay complainants insurance claim.
> Complainant seeks not only the payment of said insurance claim
of 70T plus legal interest, attys fees, and litigation expenses, but
also the revocation or cancellation of the license of Zenith to do
insurance business.

> Zenith on the other hand contends that:

o
Complainant is not the real party in interest since the policy
carries with it a designated loss payee, the BA Finance Corp
o The policy insures against loss or damage caused by fire and
lightning, etc, while theft or robbery is NOT insured against in the
policy, it not having been expressly mentioned
o Loss nevertheless is excluded under the exception of infidelity
exclusion by the operator who left it unguarded, unattended and
deserted while entrusted to him, and for failure to give timely notice
of loss
o
Complainant and/or BA Finance is guilty of concealment and
misrepresentation at the time they secured the policy, because at
the time it became operative, the complainant was NOT yet the
owner of the property insured, the property still hot having been
delivered to him, and BA finance had no insurable interest yet,
henceforth, the contract of insurance was VOID AB INITIO for lack of
insurable interest at the time the insurance took effect.

Issues and Resolutions:

(1) Whether or not the loss through theft or robbery claimed is
within the coverage of the policy.
The Insurance Commissioner, as reiterated by the SC, found for the
complainant in this wise: While the policy enumerated the risks
covered, it does NOT, however, in its express terms, limit
compensability to that stated in the enumeration. The enumerated
risks excluded did not include theft or robbery committed or
perpetrated by an unidentified culprit, hence the complainants
claim for damages is compensable.

The foregoing policy is supported by the long time honored doctrine

of contra proferentem: which provides that: any ambiguity in the
policy shall be resolved in favor of the insured and against the
insurer. This is true because insurance contracts are essentially
contracts of adhesion and applicants for insurance have no choice

but to accept the terms and conditions in the policy even if they are
not in full accord therewith.

(2) Whether or not the complainant was with insurable interest

therein when the said policy contract was procured.
The complainant has insurable interest in the insured property at
the time of the procurement of the insurance policy. As the CC
provides, the contract of sale is perfected at the moment there is a
meeting of minds upon the thing which is the object of the contract
and upon the price, and Sec. 15 of the IC allows the insurance of a
mere contingent or expectant interest in anything if the same is
founded on an actual right to the thing, or upon any valid contract.

As this is the case, mere possession of an equitable title, like that

pertaining to the buyer, gives rise to insurable interest in the
property in which such title inheres. Furthermore, considering that
Zeniths agent had been fully apprised of the circumstances prior to
the actual issuance of the policy and the endorsement, it cannot
now allege that complainant has no insurable interest on the
property insured. Zenith is now precluded by the equitable principle
of estoppel from impugning and dishonoring the very insurance
policy contract it issued and the endorsement and increase in the
coverage made through its duly authorized agent.