#07 (BY: GIA REMO)

GULF RESORTS, INC. vs. PHILIPPINE

INSURANCE CORPORATION
G.R. No. 156167. May 16, 2005
PUNO, J.:

CHARTER

INSURER: Philippine Charter Insurance Corporation

INSURED: Gulf Resorts, Inc
DOCTRINE: An insurance contract exists where the
following elements concur:
1. The insured has an insurable interest;
2. The insured is subject to a risk of loss by the
happening of the designated peril;
3. The insurer assumes the risk;
4. Such assumption of risk is part of a general scheme
to distribute actual losses among a large group of
persons bearing a similar risk; and
5. In consideration of the insurer's promise, the insured
pays a premium
FACTS:
Gulf Resorts, Inc at Agoo, La Union was originally 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. Later on it agreed to insure
with respondent the properties covered by American Home
Assurance Company provided that the policy wording and
rates in said policy be copied in the policy to be issued by
defendant
On July 16, 1990 an earthquake struck Central Luzon and
Northern Luzon and plaintiffs properties covered by the
insurance policy issued by insurer, including the two
swimming pools in its Agoo Playa Resort were damaged.
After the earthquake, Gulf Resorts advised respondent that
it would be making a claim under its Insurance Policy for

damages on its properties. Respondent instructed petitioner

to file a formal claim, then assigned the investigation of the
claim to an independent claims adjuster, Bayne Adjusters
and Surveyors, Inc.
On July 30, 1990, respondent, through its adjuster,
requested petitioner to submit various documents in support
of its claim. On August 7, 1990, Bayne Adjusters and
Surveyors, Inc., through its Vice-President A.R. de Leon,
rendered a preliminary report finding extensive damage
caused by the earthquake to the clubhouse and to the two
swimming pools. Mr. de Leon stated that except for the
swimming pools, all affected items have no coverage for
earthquake shocks. On August 11, 1990, petitioner filed its
formal demand for settlement of the damage to all its
properties in the Agoo Playa Resort. On August 23,
1990, respondent denied petitioners claim on the ground
that its insurance policy only afforded earthquake shock
coverage to the two swimming pools of the resort. Petitioner
and respondent failed to arrive at a settlement. Thus, on
January 24, 1991, petitioner filed a complaint for sum of
money.
On February 21, 1994, the lower court after trial ruled in
favor of the respondent.
ANNUAL PAYMENT AGREEMENT ON
LONG TERM POLICIES
THE INSURED UNDER THIS POLICY HAVING
ESTABLISHED AGGREGATE SUMS INSURED IN
EXCESS
OF
FIVE
MILLION
PESOS,
IN
CONSIDERATION OF A DISCOUNT OF 5% OR 7 % OF
THE NET PREMIUM x x x POLICY HEREBY
UNDERTAKES TO CONTINUE THE INSURANCE
UNDER THE ABOVE NAMED x x x AND TO PAY THE
PREMIUM.
Earthquake Endorsement
In consideration of the payment by the Insured to
the Company of the sum of P. . . . . . . . . . . . . . . . .

additional
premium
the
Company
agrees,
notwithstanding what is stated in the printed
conditions of this Policy to the contrary, that this
insurance covers loss or damage (including loss or
damage by fire) to any of the property insured by
this Policy occasioned by or through or in
consequence of Earthquake.
Provided always that all the conditions of this
Policy shall apply (except in so far as they may be
hereby expressly varied) and that any reference
therein to loss or damage by fire should be
deemed to apply also to loss or damage
occasioned by or through or in consequence of
Earthquake.

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.
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
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. The policy cannot be construed piecemeal.
Certain stipulations cannot be segregated and then made to
control; neither do particular words or phrases necessarily
determine its character. Petitioner cannot focus on the
earthquake shock endorsement to the exclusion of the other
provisions. 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.

A careful examination of the premium recapitulation will

show that it is the clear intent of the parties to extend
earthquake shock coverage only to the two swimming pools.
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. Thus,
an insurance contract exists where the following elements
concur:
1. The insured has an insurable interest;
2. The insured is subject to a risk of loss by the
happening of the designated peril;
3. The insurer assumes the risk;
4. Such assumption of risk is part of a general scheme
to distribute actual losses among a large group of
persons bearing a similar risk; and
5. In consideration of the insurer's promise, the
insured pays a premium.(Emphasis ours)
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
payable 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 previous insurance policies
from AHAC-AIU.

#08 (BY: GIA REMO)

SIMON DE LA CRUZ, vs. THE CAPITAL INSURANCE and
SURETY CO., INC.
G.R. No. L-21574, June 30, 1966
BARRERA, J.:
DOCTRINE: The terms "accident" and "accidental", as used
in insurance contracts, have not acquired any technical
meaning, and are construed by the courts in their ordinary
and common acceptation. Thus, the terms have been taken
to mean that which happen by chance or fortuitously,
without intention and design, and which is unexpected,
unusual, and unforeseen. An accident is an event that takes
place without one's foresight or expectation an event that
proceeds from an unknown cause, or is an unusual effect of
a known cause and, therefore, not expected.
INSURER: Capital Insurance & Surety Co., Inc
INSURED: Eduardo de la Cruz
FACTS:

Eduardo de la Cruz, a mucker in the Itogon-Suyoc Mines, Inc.

in Baguio, was the holder of an accident insurance policy
underwritten by the Capital Insurance & Surety Co., Inc., for
the period beginning November 13, 1956 to November 12,
1957. On January 1, 1957, in connection with the celebration
of the New Year, the Itogon-Suyoc Mines, Inc. sponsored
a boxing contest for general entertainment wherein
Eduardo, a non-professional boxer participated. In the
course of his bout with another person, likewise a nonprofessional, of the same height, weight, and size, Eduardo
slipped and was hit by his opponent on the left part of the
back of the head, causing Eduardo to fall, with his head
hitting the rope of the ring. He was brought to the Baguio
General Hospital the following day. The cause of death was
reported as hemorrhage, intracranial, left. Simon de la
Cruz, the father of the insured and who was named
beneficiary under the policy, filed a claim with the
insurance company for payment of the indemnity under the
insurance policy. As the claim was denied, Simon instituted
an action for specific performance. The insurer in its defense
argued that the death of Eduardo, caused by his
participation in a boxing contest, was not accidental
and, therefore, not covered by insurance. After due
hearing the court rendered the decision in favor of Simon De
La Cruz.
ISSUE: Whether the death of Eduardo, caused by his
participation in a boxing contest, was accidental and
considered covered by his accidental insurance policy?
HELD: YES, the death of the insured in the case at bar
is entitled to indemnification under the policy.
Where the death or injury is not the natural or probable
result of the insured's voluntary act, or if something
unforeseen occurs in the doing of the act which produces
the injury, the resulting death is within the protection of
policies insuring against death or injury from accident. In the
present case, while the participation of the insured in the

boxing contest is voluntary, the injury was sustained when

he slid, giving occasion to the infliction by his opponent of
the blow that threw him to the ropes of the ring. Without this
unfortunate incident, that is, the unintentional slipping of
the deceased, perhaps he could not have received that blow
in the head and would not have died. The fact that boxing is
attended with some risks of external injuries does not make
any injuries received in the course of the game not
accidental. In boxing as in other equally physically rigorous
sports, such as basketball or baseball, death is not ordinarily
anticipated to result. If, therefore, it ever does, the injury or
death can only be accidental or produced by some
unforeseen happening or event as what occurred in this
case. Furthermore, the policy involved herein specifically
excluded from its coverage
(e) Death or disablement consequent upon the
Insured engaging in football, hunting, pigsticking,
steeplechasing, polo-playing, racing of any kind,
mountaineering, or motorcycling.
Death or disablement resulting from engagement in boxing
contests was not declared outside of the protection of the
insurance contract. Failure of the defendant insurance
company to include death resulting from a boxing match or
other sports among the prohibitive risks leads inevitably to
the conclusion that it did not intend to limit or exempt itself
from liability for such death.
#09 (BY: GIA REMO)
HEIRS OF LORETO C. MARAMAG, represented by
surviving spouse VICENTA PANGILINAN MARAMAG
vs.
EVA VERNA DE GUZMAN MARAMAG, ODESSA DE
GUZMAN MARAMAG, KARL BRIAN DE GUZMAN
MARAMAG, TRISHA ANGELIE MARAMAG, THE INSULAR
LIFE ASSURANCE COMPANY, LTD., and GREAT PACIFIC
LIFE ASSURANCE CORPORATION
GR No. 181132, JUNE 5, 2009
NACHURA, J.

INSURER: from Insular Life Assurance Company, Ltd. and

Great Pacific Life Assurance Corporation
INSURED: Loreto Maramag
DOCTRINE: The 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.1[20] The exception to this rule is a
situation where the insurance contract was intended to
benefit third persons who are not parties to the same in the
form of favorable stipulations or indemnity. In such a case,
third parties may directly sue and claim from the insurer
FACTS:
A petition was filed by petitioners against respondents for
revocation and/or reduction of insurance proceeds for being
void and/or inofficious, with prayer for a temporary
restraining order (TRO) and a writ of preliminary injunction.
Petitioners alleged:
1. That they are the legitimate wife and children of
Loreto Maramag, while respondents are Loretos
illegitimate family.
2. Eva de Guzman Maramag 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); and
3. The illegitimate children of Loreto: Odessa, Karl
Brian, and Trisha Angelie were entitled only to onehalf of the legitime of the legitimate children, thus,
the proceeds released to Odessa and those to be

1[20] Southern Luzon Employees Ass. v. Golpeo, et al., 96 Phil. 83, 86

(1954), citing Del Val v. Del Val, 29 Phil. 534, 540-541 (1915).

released to Karl Brian and Trisha Angelie were

inofficious and should be reduced
4. 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
Insular admitted that 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 it ascertained that Eva was
not the legal wife of Loreto, it disqualified her as a
beneficiary and divided the proceeds among Odessa, Karl
Brian, and Trisha Angelie, as the remaining designated
beneficiaries; and that it released Odessas share as she
was of age, but withheld the release of the shares of minors
Karl Brian and Trisha Angelie pending submission of letters
of guardianship.
Insular alleged that the complaint or petition failed to state
a cause of action insofar as it sought to declare as void the
designation of Eva as beneficiary, because Loreto revoked
her designation and insofar as it sought to declare as
inofficious the shares of Odessa, Karl Brian, and Trisha
Angelie, considering that no settlement of Loretos estate
had been filed nor had the respective shares of the heirs
been determined. Insular further claimed that it was bound
to honor the insurance policies designating the children of
Loreto with Eva as beneficiaries pursuant to Section 53 of
the Insurance Code.
Grepalife alleged that Eva was not designated as an
insurance policy beneficiary; that the claims filed by
Odessa, Karl Brian, and Trisha Angelie were denied
because Loreto was ineligible for insurance due to a
misrepresentation in his application form that he was
born on December 10, 1936 and, thus, not more than
65 years old when he signed it in September 2001;

that the case was premature, there being no claim filed by

the legitimate family of Loreto; and that the law on
succession does not apply where the designation of
insurance beneficiaries is clear.
ISSUE: Whether the insurance proceeds should be
awarded to petitioners, herein legitimate wife and
children of Loreto Maramag?
HELD: NO
It is evident from the face of the complaint that petitioners
are not entitled to a favorable judgment in light of Article
2011 of the Civil Code which expressly provides that
insurance contracts shall be governed by special laws, i.e.,
the Insurance Code. Section 53 of the Insurance Code states
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.

Pursuant theretot is obvious that the 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. The exception to this rule
is a situation where the insurance contract was intended to
benefit third persons who are not parties to the same in the
form of favorable stipulations or indemnity. In such a case,
third parties may directly sue and claim from the insurer.
Petitioners are third parties to the insurance
contracts with Insular and Grepalife and, thus, are
not entitled to the proceeds thereof. Accordingly,
respondents Insular and Grepalife have no legal
obligation to turn over the insurance proceeds to
petitioners. The revocation of Eva as a beneficiary in one
policy and her disqualification as such in another are of no
moment considering that the designation of the illegitimate
children as beneficiaries in Loretos insurance policies

remains valid. Because no legal proscription exists in

naming as beneficiaries the children of illicit relationships by
the insured, the shares of Eva in the insurance proceeds,
whether forfeited by the court in view of the prohibition on
donations under Article 739 of the Civil Code or by the
insurers themselves for reasons based on the insurance
contracts, must be awarded to the said illegitimate children,
the designated beneficiaries, to the exclusion of petitioners.
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.

#10 (BY: GIA REMO)

SOUTHERN LUZON EMPLOYEES' ASSOCIATION, plaintif,
vs. JUANITA GOLPEO, ET AL., defendants-appellants;
AQUILINO MALOLES , ET AL., defendants-appellees;
ELSIE HICBAN, ET AL., defendants; MARCELINO
CONCEPCION, ET AL., intervenors-appellants.
G.R. No. L-6114, October 30, 1954
PARAS, C.J.:
DOCTRINE: The contract of life insurance is a special
contract and the destination of the proceeds thereof is
determined by special laws which deal exclusively with that
subject. The Civil Code has no provisions which relate
directly and specifically to life-insurance contract or to the
destination of life-insurance proceeds. That subject is
regulate exclusively by the Code of Commerce which
provides for the terms of the contract, the relations of the
parties and the destination of the proceeds of the policy.
FACTS:
Southern Luzon Employees' Association is composed of
laborers and employees of Laguna Tayabas Bus Co., and
Batangas Transportation Company. Roman A. Concepcion
was a member until his death on December 13, 1950.
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.

Three sets of claimants presented themselves, namely,

Juanita Golpeo, legal wife of Roman A. Concepcion, and
her children, named beneficiaries by the deceased;
and Elsie Hicban, another common law wife of Roman A.
Concepcion, and her children.
The association instituted an action for interpleader against
the three conflicting claimants. 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. The court rendered a decision,
declaring the defendants Aquilina Maloles and her
children the sole beneficiaries. The decision is based
mainly on the theory that the contract between the plaintiff
and the deceased Roman A. Concepcion partook of the
nature of an insurance and that, therefore, the amount in
question belonged exclusively to the beneficiaries
ISSUE: Can Aquilina Molales common-law wife and her
illegitimate children can claim the benefits
HELD: YES.
Appellant also contend that the stipulation between the
plaintiff and the deceased Roman A. Concepcion regarding
the specification of the latter's beneficiaries, and the
resolution of September 17, 1949, are void for the being
contrary to law, moral or public policy. Specifically, the
appellants cite 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 defendant-appellee Aquilina Maloles, cannot
be named a beneficiary, every assuming that the insurance
law is applicable. Without considering the intimation in the

brief for the defendant appellees that appellant Juanita

Golpeo, by her silence and actions, had acquiesced in the
illicit relations between her husband and appellee Aquilina
Maloles, appellant argument would certainly not apply to the
children of Aquilina likewise named beneficiaries by the
deceased Roman A. Concepcion. As a matter of a fact the
new Civil Code recognized certain successional rights of
illegitimate children. (Article 287.)
The other contention advanced rather exhaustively by
counsel for appellants, and the citations in support there of
are either negative or rendered inapplicable by the decisive
considerations already stated. In this connection it is
noteworthy that the estate of the deceased Roman A.
Concepcion was not entirely left without anything legally
due it since it is an admitted fact that the sum of P2,500
was paid by Laguna Tayabas Bus Co., employer of the
deceased to the appellants under the Workmen's
Compensation Act. Wherefore, the appealed decision is
affirmed, and it is so ordered without costs.

#11 (BY: GIA REMO)

BASILIA BERDIN VDA. DE CONSUEGRA; JULIANA,
PACITA, MARIA LOURDES, JOSE, JR., RODRIGO, LINEDA
and LUIS, all surnamed CONSUEGRA,
vs.
GOVERNMENT
SERVICE
INSURANCE
SYSTEM,
COMMISSIONER OF PUBLIC HIGHWAYS, HIGHWAY
DISTRICT ENGINEER OF SURIGAO DEL NORTE,
COMMISSIONER OF CIVIL SERVICE, and ROSARIO
DIAZ,
G.R. No. L-28093 January 30, 1971
ZALDIVAR, J.
DOCTRINE: 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.
FACTS:
During his lifetime, Jose Consuegra, member of the GSIS
who was employed as a shop foreman of the office of the
District Engineer in the province of Surigao del Norte,
contracted two marriages:
FIRST: Rosario Diaz (respondent), solemnized on July 15,
1937, out of which marriage were born two children,

namely, Jose Consuegra, Jr. and Pedro Consuegra, but both

predeceased their father; and
SECOND: Basilia Berdin, on May 1, 1957 in good faith
while the first marriage is subsisting, out of which marriage
were born seven children, namely, Juliana, Pacita, Maria
Lourdes, Jose, Rodrigo, Lenida and Luz
When Consuegra died on September 26, 1965, the proceeds
of his life insurance policy were paid by the GSIS Basilia
Berdin and her children who were the beneficiaries named in
the policy. Consuegra did not designate any
beneficiary who would receive the retirement
insurance benefits due to him.
Rosario Diaz, the widow by the first marriage, filed a claim
with the GSIS asking that the retirement insurance benefits
be paid to her as the only legal heir of Consuegra,
considering that the deceased did not designate any
beneficiary with respect to his retirement insurance
benefits.
Basilia Berdin and her children, likewise, filed a similar claim
with the GSIS, asserting that being the beneficiaries named
in the life insurance policy of Consuegra, they are the only
ones entitled to receive the retirement insurance benefits
due the deceased Consuegra.
GSIS ruled that the legal heirs of the late Jose Consuegra
were Rosario Diaz (respondent), his widow by his first
marriage who is entitled to one-half, or 8/16, of the
retirement insurance benefits, on the one hand; and Basilia
Berdin, his widow by the second marriage and their seven
children, on the other hand, who are entitled to the
remaining one-half, or 8/16, each of them to receive an
equal share of 1/16.
Basilia Berdin and her children (petitioner) filed a petition
for mandamus with preliminary injunction in the Court
of First Instance of Surigao praying that they be declared the

legal heirs and exclusive beneficiaries of the retirement

insurance of the late Jose Consuegra, and that a writ of
preliminary
injunction
be
issued
restraining
the
implementation of the adjudication made by the GSIS.
The lower court rendered judgment declaring both petitioner
and respondents entitled to the retirement benefits.
ISSUE: Whether both Basilia and Rosario who contracted
marriage to Jose Consuegra in good faith are each entitled
to half of the retirement insurance benefits?
HELD:
YES. In the case of the proceeds of a life insurance, the
same are paid to whoever is named the beneficiary in the
life insurance policy. As in the case of a life insurance
provided for in the Insurance Act (Act 2427, as amended),
the beneficiary in a life insurance under the GSIS may not
necessarily be a heir of the insured. The insured in a life
insurance may designate any person as beneficiary unless
disqualified to be so under the provisions of the Civil Code. 4
And in the absence of any beneficiary named in the life
insurance policy, the proceeds of the insurance will go to the
estate of the insured.
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.
The lower court has correctly applied the ruling of this Court
in the case of Lao, et al. vs. Dee Tim, et al., 45 Phil. 739 as
cited in the stipulation of facts and in the decision appealed
from.5 In the recent case of Gomez vs. Lipana, L-23214, June
30, 1970, 6 this Court, in construing the rights of two women
who were married to the same man a situation more or
less similar to the case of appellant Basilia Berdin and
appellee Rosario Diaz held "that since the defendant's
first marriage has not been dissolved or declared void the
conjugal partnership established by that marriage has not
ceased. Nor has the first wife lost or relinquished her status
as putative heir of her husband under the new Civil Code,
entitled to share in his estate upon his death should she
survive him. Consequently, whether as conjugal partner in a
still subsisting marriage or as such putative heir she has an
interest in the husband's share in the property here in
dispute.... " And with respect to the right of the second wife,
this Court observed that although the second marriage can
be presumed to be void ab initio as it was celebrated while
the first marriage was still subsisting, still there is need for
judicial declaration of such nullity. And inasmuch as the
conjugal partnership formed by the second marriage was
dissolved before judicial declaration of its nullity, "[t]he only
lust and equitable solution in this case would be to
recognize the right of the second wife to her share of onehalf in the property acquired by her and her husband and
consider the other half as pertaining to the conjugal
partnership of the first marriage."

DOCTRINE: 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. As a consequence, the proscription in Article 739
of the new Civil Code should equally operate in life
insurance contracts.

FACTS:

#12 (BY: GIA REMO)

THE INSULAR LIFE ASSURANCE COMPANY, LTD. vs.
CARPONIA T. EBRADO and PASCUALA VDA. DE
EBRADO

G.R. No. L-44059 October 28, 1977

MARTIN, J.:

INSURER: The Insular Life Assurance Co., Ltd

INSURED: Buenaventura Ebrado

The Insular Life Assurance Co., Ltd., issued a life insurance

policy in favor of Buenaventura Ebrado for Php 5,882.00
with a, rider for Accidental Death for the same amount.
Buenaventura designated Carponia T. Ebrado (respondent
common-law wife) as the revocable beneficiary in his policy.
Later on, Buenaventura was hit by a failing branch of a tree
which causing his death. As the policy was in force, The
Insular Life Assurance Co., Ltd. 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 also in the
amount of P5,882.00 and the refund of P18.00 paid for the
premium due November, 1969, minus the unpaid premiums
and interest in the sum of P36.27.

Carponia T. Ebrado filed with the insurer a claim for the

proceeds of the Policy as the designated beneficiary therein,
although she admits 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, not the common-law
wife, Carponia T. Ebrado. In doubt as to whom the insurance
proceeds shall be paid, the insurer, The Insular Life
Assurance Co., Ltd. commenced an action for Interpleader
before the Court of First Instance of Rizal. The trial court
rendered judgment declaring among others, Carponia T.
Ebrado disqualified from becoming beneficiary of the
insured and directing the payment of the insurance
proceeds to the estate of the deceased insured.
.
ISSUE: Can a common-law wife named as beneficiary in the
life insurance policy of a legally married man claim the
proceeds thereof in case of death of the latter?

HELD: NO

The general rules of civil law should be applied to resolve

this void in the Insurance Law. Article 2011 of the New Civil
Code 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." 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 life insurance policy by the person who cannot make a
donation to him.
Common-law spouses are, definitely,
barred from receiving donations from each other.

Article 739 of the new Civil Code provides:

The following donations shall be void:
1. Those made between persons who were
guilty of adultery or concubinage at the time
of donation;
Those made between persons found guilty of
the same criminal offense, in consideration
thereof;
3. Those made to a public officer or his wife,
descendants or ascendants by reason of his
office.
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 guilt of
the donee may be proved by preponderance
of evidence in the same action.

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. As a consequence, the proscription in Article 739
of the new Civil Code should equally operate in life
insurance contracts. The mandate of Article 2012 cannot be

laid aside: any person who cannot receive a donation cannot

be named as beneficiary in the life insurance policy of the
person who cannot make the donation.