part four - insurance

8/10/2019 PART FOUR - Insurance

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PART FOUR

Payment of Proceeds and Filing of Claims

I. In L:ife Insurance242, 180

Sec. 242. The proceeds of a life insurance policy shall be paid immediately uponmaturity of the policy, unless such proceeds are made payable in installmentsor as an annuity, in which case the installments, or annuities shall be paid asthey become due: Provided, however, That in the case of a policy maturing bythe death of the insured, the proceeds thereof shall be paid within sixty daysafter presentation of the claim and filing of the proof of the death of theinsured. Refusal or failure to pay the claim within the time prescribed hereinwill entitle the beneficiary to collect interest on the proceeds of the policy forthe duration of the delay at the rate of twice the ceiling prescribed by the

Monetary Board, unless such failure or refusal to pay is based on the groundthat the claim is fraudulent.

The proceeds of the policy maturing by the death of the insured payable to thebeneficiary shall include the discounted value of all premiums paid in advanceof their due dates, but are not due and payable at maturity.

Sec. 180. An insurance upon life may be made payable on the death of the person, or onhis surviving a specified period, or otherwise contingently on the continuanceor cessation of life.

Every contract or pledge for the payment of endowments or annuities shall be

considered a life insurance contract for purpose of this Code.

In the absence of a judicial guardian, the father, or in the latter's absence or incapacity,the mother, or any minor, who is an insured or a beneficiary under a contractof life, health or accident insurance, may exercise, in behalf of said minor, anyright under the policy, without necessity of court authority or the giving of abond, where the interest of the minor in the particular act involved does notexceed twenty thousand pesos. Such right may include, but shall not belimited to, obtaining a policy loan, surrendering the policy, receiving theproceeds of the policy, and giving the minor's consent to any transaction onthe policy.

Sec. 180-A. The insurer in a life insurance contract shall be liable in case of suicidesonly when it is committed after the policy has been in force for a period of two

years from the date of its issue or of its last reinstatement, unless the policyprovides a shorter period: Provided, however, That suicide committed in thestate of insanity shall be compensable regardless of the date ofcommission. (As amended by Batasang Pambansa Blg. 874).

1. In general

Alabat vs. Alabat, 21 SCRA 14979

G.R. No. L-22169 December 29, 1967

SERGIO ALABAT, PETRONILO ALABAT, NICOLAS ALABAT and FORTUNATO

ALABAT,plaintiffs-appellants,vs.

TORIBIA TANDOG VDA. DE ALABAT, LEONCIO ALABAT, JARMILO ALABAT, andPREMIA ALABAT,defendants-appellees.

WENIFREDA ALMEDA,intervenor.


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Francisco M. Alaba for plaintiffs-appellants.

Ricardo Navarro, Sr. for defendants-appellees.

REYES, J.B.L., J.:

Direct appeal on questions of law from a decision of the Court of First Instance of Surigao (in its CivilCase No. 1318).

Appellants, who are the four children of the late Escolastico Alabat by his first marriage with Cornelia

Bucayan (also deceased) have instituted this action for partition in the Court below against the four (4)

Alabat appellees, children of the second marriage of Escolastico, and against his surviving widow,Toribia Tandog. Plaintiffs sought partition of several unregistered parcels of land in Taganaan, Surigao,

and of a cash deposit of P4,000.00 in the Philippine National Bank, Butuan Branch, standing in the

name of Escolastico Alabat. Defendants pleaded in answer that the properties in question originated

from a death benefit payment made by the U.S.Veterans Administration to Escolastico Alabat and hissecond wife Toribia Tandog, on account of the death of their son Leonardo Alabat, a full-blood brother

of defendants, who was a USAFFE soldier killed in action during World War II; that said Leonardodied unmarried but survived by his parents and by a natural daughter, intervenor-appellee, Wenifreda

Alabat.lawphil.netDefendants claimed that the only heirs to the properties sought to be partitionedwere the soldier Leonardo Alabat's surviving mother and his daughter Wenifreda, herein intervenor.

At the trial the parties agreed upon the following facts: (Rec. on Appeal, pp. 14-15)

1. That a certain Wenifreda Alabat, the intervenor, was born to Carmen Almeda with the nowdeceased Leonardo Alabat as her father, but Carmen Almeda and Leonardo Alabat were never

legally married altho they were in a capacity to marry at the time that Wenifreda Alabat was

conceived;

2. That Carmen Almeda also filed a claim with the USVeterans Administration for the death

benefit of Leonardo Alabat for the amount of P16,000.00 but this amount was not granted to herbut to the now deceased Escolastico Alabat and the defendant Toribia Tandog, because Carmen

Almeda could not show proof of having been legally married to Leonardo Alabat;

3. That the parcel of land that were purchased with the money received from the USVeterans

Administration as death benefit of Leonardo Alabat are parcels 1, 2, 3, 4 and 5 under

paragraph three of the amended complaint; and

4. That the amount of P4,000.00 mentioned in paragraph 3 of the complaint is also a part of the

P16,000.00 received by the spouses Escolastico Alabat and Toribia Tandog which has beendeposited with the Philippine National Bank, in Butuan City.

In addition, the trial Judge, Hon. Teofilo Buslon, further found from the evidence that WenifredaAlabat "enjoyed the status of a recognized natural child from the time she was born until the present

time" (Decision, R. App., p. 16); and on the basis of Article 991 of the new Civil Code, decided that the

only parties entitled to share in the property were the mother, appellee Toribia Tandog and intervenor

Wenifreda Alabat, to the exclusion of the appellants, issue of Escolastico's first marriage. Plaintiffsappealed.

We agree with appellants that the appealed decision can not stand as it is in error on at least four counts.

First, the Court below erred in applying the new Civil Code to the succession of Leonardo Alabat who

died in 1945, or even before, (the exact date being uncertain) under the regime of the Code of 1889(Civil Code of the Phil., Art. 2263).

Next, it erred in declaring the natural daughter, Wenifreda Alabat, entitled to succeed her late natural

father, Leonardo Alabat, solely on the basis of her enjoyment of the status of a natural child. It is an

elementary and basic principle in our law of succession that the rights of a natural child spring not from
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the filiation itself but from the child's acknowledgment by the natural parent, made voluntarily or by

court decree.1Equally basic and elementary but also ignored by the trial Court, is the fact that

possession or enjoyment of the status of natural child isper se not a sufficient operativeacknowledgment but only a ground to compel the parent to acknowledge the child (Civ. Code of 1889,

Art. 135; new Civil Code, Art. 283).lawphil.netThe record of appeal before us nowhere shows, or even

suggests, that intervenor Wenifreda was voluntarily or compulsorily acknowledged in the mannerprescribed by law. Neither does it show that, because her natural father died during her minority, shehas instituted a timely action to compel her acknowledgment. As the case stands now, there is no way

to declare her possessed of hereditary rights in the estate of Leonardo Alabat. Whether she may still

bring an action to compel acknowledgment, we can not decide now, for lack of adequate data.

Third, the trial Court erred in considering the death benefit payment by the U.S.Veterans

Administration as part of the estate of Leonardo Alabat. This money was paid to his parents by theUnited States Government by way of indemnity or insurance for the death of the soldier. The latter was

never entitled to it himself, since he died before the payment accrued. The money paid was therefore

exclusive property of Leonardo Alabat's parents, Escolastico Alabat and Toribia Tandog. Considering it

community property, Escolastico was entitled to one half thereof, and, hence, of the property acquiredthereby. Upon his death in 1959 without leaving any testament, that half descended unto all his eight

(8) surviving children of the first and second marriages, with the surviving widow being also entitled toa share equal to that of each of the children (Civil Code of the Philippines, Art. 996):

Art. 996. If a widow or widower and legitimate children or descendants are left, the surviving

spouse has in the succession the same share as that of each of the children.

In the fourth place, the assumption in the appealed decision that Article 991 of the new Civil Codeapplies, is erroneous, in view of the facts previously adverted to. But even if it did apply, the death

benefit payment should belong, in equal shares, to the natural child and the parents of the soldier

Leonardo Alabat and the half of the parents can not belong to the mother alone, for she was not the onlysurviving parent of the predeceased Leonardo Alabat. In excluding the father, Escolastico, the lowerCourt acted contrary to all logic and common sense.

After all is said, the basic fact is that the estate to be settled is that of Escolastico Alabat, and not that ofhis predeceased son, Leonardo Alabat, as mistakenly assumed by the Court a quo.lawphilHence, the

plaintiffs-appellants being children of Escolastico are clearly entitled to share in the properties

described in their complaint and to maintain this suit for partition.lawphil.net

Whether the natural child, Wenifreda, can succeed to the share of her father, Leonardo, by right of

representation, depends upon whether she has been properly acknowledged as his natural child.Considering that this point was apparently not litigated, and taking into account that if Leonardo died

during his daughter's minority, the latter had four (4) years after attaining majority, to file an action to

compel acknowledgment,2both equity and justice demand that Wenifreda be given ample opportunity

to establish in the Court below whatever rights she is entitled to in accordance with law.

IN VIEW OF THE FOREGOING, the decision appealed from is reversed and set aside, and the case isordered remanded to the Court of origin for further proceedings conformably to this opinion.lawphil

Costs against defendants-appellees. So ordered.

Concepcion, C.J., Makalintal, Bengzon, J.P., Zaldivar, Sanchez, Castro and Angeles, JJ.,concur.

Dizon and Fernando, JJ.,took no part.

Consuegra vs. GSIS, 37 SCRA 315

G.R. No. L-28093 January 30, 1971
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BASILIA BERDIN VDA. DE CONSUEGRA; JULIANA, PACITA, MARIA LOURDES, JOSE, JR., RODRIGO,LINEDA and LUIS, all surnamed CONSUEGRA, petitioners-appellants,

vs.GOVERNMENT SERVICE INSURANCE SYSTEM, COMMISSIONER OF PUBLIC HIGHWAYS, HIGHWAYDISTRICT ENGINEER OF SURIGAO DEL NORTE, COMMISSIONER OF CIVIL SERVICE, and ROSARIO

DIAZ, respondents-appellees.

Bernardino O. Almeda for petitioners-appellants.

Binag and Arevalo, Jr. for respondent-appellee Government Service Insurance System.

Office of the Solicitor General for other respondents-appellees.

ZALDIVAR, J.:

Appeal on purely questions of law from the decision of the Court of First Instance of Surigao del Norte, datedMarch 7, 1967, in its Special Proceeding No. 1720.

The pertinent facts, culled from the stipulation of facts submitted by the parties, are the following:

The late Jose Consuegra, at the time of his death, was employed as a shop foreman of the office of the DistrictEngineer in the province of Surigao del Norte. In his lifetime, Consuegra contracted two marriages, the first withherein respondent Rosario Diaz, solemnized in the parish church of San Nicolas de Tolentino, Surigao, Surigao,on July 15, 1937, out of which marriage were born two children, namely, Jose Consuegra, Jr. and PedroConsuegra, but both predeceased their father; and the second, which was contracted in good faith while the firstmarriage was subsisting, with herein petitioner Basilia Berdin, on May 1, 1957 in the same parish andmunicipality, out of which marriage were born seven children, namely, Juliana, Pacita, Maria Lourdes, Jose,Rodrigo, Lenida and Luz, all surnamed Consuegra.

Being a member of the Government Service Insurance System (GSIS, for short) when Consuegra died onSeptember 26, 1965, the proceeds of hislife insurance under policy No. 601801 were paid by the GSIS to

petitioner Basilia Berdin and her children who were the beneficiaries named in the policy. Having been in theservice of the government for 22.5028 years, Consuegra was entitled toretirement insurance benefits in thesum of P6,304.47 pursuant to Section 12(c) of Commonwealth Act 186 as amended by Republic Acts 1616 and3836. Consuegra did not designate any beneficiary who would receive theretirement insurance benefits due tohim. Respondent Rosario Diaz, the widow by the first marriage, filed a claim with the GSIS asking that theretirement insurance benefits be paid to her as the only legal heir of Consuegra, considering that the deceaseddid not designate any beneficiary with respect to his retirement insurance benefits. Petitioner Basilia Berdin andher children, likewise, filed a similar claim with the GSIS, asserting that being the beneficiaries named in the lifeinsurance policy of Consuegra, they are the only ones entitled to receive the retirement insurance benefits duethe deceased Consuegra. Resolving the conflicting claims, the GSIS ruled that the legal heirs of the late JoseConsuegra were Rosario Diaz, his widow by his first marriage who is entitled to one-half, or 8/16, of theretirement insurance benefits, on the one hand; and Basilia Berdin, his widow by the second marriage and theirseven children, on the other hand, who are entitled to the remaining one-half, or 8/16, each of them to receive anequal share of 1/16.

Dissatisfied with the foregoing ruling and apportionment made by the GSIS, Basilia Berdin and her children1filed

on October 10, 1966 a petition for mandamus with preliminary injunction in the Court of First Instance of Surigao,naming as respondents the GSIS, the Commissioner of Public Highways, the Highway District Engineer ofSurigao del Norte, the Commissioner of Civil Service, and Rosario Diaz, praying that they (petitioners therein) bedeclared the legal heirs and exclusive beneficiaries of theretirement insurance of the late Jose Consuegra, andthat a writ of preliminary injunction be issued restraining the implementation of the adjudication made by theGSIS. On October 26, 1966, the trial court issued an order requiring therein respondents to file their respectiveanswers, but refrained from issuing the writ of preliminary injunction prayed for. On February 11, 1967, theparties submitted a stipulation of facts, prayed that the same be admitted and approved and that judgment berendered on the basis of the stipulation of facts. On March 7, 1967, the court below rendered judgment, thepertinent portions of which are quoted hereunder:

This Court, in conformity with the foregoing stipulation of facts, likewise is in full accord with theparties with respect to the authority cited by them in support of said stipulation and which isherein-below cited for purposes of this judgment, to wit:

"When two women innocently and in good faith are legally united in holy matrimony to the sameman, they and their children, born of said wedlock, will be regarded as legitimate children andeach family be entitled to one half of the estate. Lao & Lao vs. Dee Tim, 45 Phil. 739; Estrella vs.Laong Masa, Inc., (CA) 39 OG 79; Pisalbon vs. Bejec, 74 Phil. 88.
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WHEREFORE, in view of the above premises, this Court is of the opinion that the foregoingstipulation of facts is in order and in accordance with law and the same is hereby approved.Judgment, therefore, is hereby rendered declaring the petitioner Basilia Berdin Vda. deConsuegra and her co-petitioners Juliana, Pacita, Maria Lourdes, Jose, Jr., Rodrigo, Lenida andLuis, all surnamed Consuegra, beneficiary and entitled to one-half (1/2) of the retirement benefitin the amount of Six Thousand Three Hundred Four Pesos and Fourty-Seven Centavos(P6,304.47) due to the deceased Jose Consuegra from the Government Service InsuranceSystem or the amount of P3,152.235 to be divided equally among them in the proportionalamount of 1/16 each. Likewise, the respondent Rosario Diaz Vda. de Consuegra is herebydeclared beneficiary and entitled to the other half of the retirement benefit of the late JoseConsuegra or the amount of P3,152.235. The case with respect to the Highway District Engineerof Surigao del Norte is hereby ordered dismissed.

Hence the present appeal by herein petitioners-appellants, Basilia Berdin and her children.

It is the contention of appellants that the lower court erred in not holding that the designated beneficiaries in thelife insurance of the late Jose Consuegra are also the exclusive beneficiaries in the retirement insurance ofsaid deceased. In other words, it is the submission of appellants that because the deceased Jose Consuegrafailed to designate the beneficiaries in hisretirement insurance ,the appellants who were the beneficiaries

named in the life insurance should automatically be considered the beneficiaries to receive the retirementinsurance benefits, to the exclusion of respondent Rosario Diaz. From the arguments adduced by appellants intheir 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 thatone is a part or an extension of the other, such that whoever is named the beneficiary in the life insurance is alsothe beneficiary in the retirement insurance when no such beneficiary is named in the retirement insurance.

The contention of appellants is untenable.

It should be noted that the law creating the Government Service Insurance System is Commonwealth Act 186which was enacted by the National Assembly on November 14, 1936. As originally approved, CommonwealthAct 186 provided for the compulsory membership in the Government Service Insurance System of all regularlyand permanently appointed officials and employees of the government, considering as automatically insured on

life all such officials and employees, and issuing to them the corresponding membership policy under the termsand conditions as provided in the Act.

2

Originally, Commonwealth Act 186 providedfor life insurance only. Commonwealth Act 186 was amended byRepublic Act 660 which was enacted by the Congress of the Philippines on June 16, 1951, and, among others,the amendatory Act provided that aside from the system of life insurance under the Government ServiceInsurance System there was also established the system of retirement insurance. Thus, We will note in RepublicAct 660 that there is a chapter on life insurance and another chapter on retirement insurance. 3 Under thechapter on life insurance are sections 8, 9 and 10 of Commonwealth Act 186, as amended; and under thechapter on retirement insurance are sections 11, 12, 13 and 13-A. On May 31, 1957, Republic Act 1616 wasenacted by Congress, amending section 12 of Commonwealth Act 186 as amended by Republic Act 660, byadding thereto two new subsections, designated as subsections (b) and (c). This subsection (c) of section 12 ofCommonwealth Act 186, as amended by Republic Acts 660, 1616 and 3096, was again amended by Republic

Act 3836 which was enacted on June 22, 1963. lwph1.tThe pertinent provisions of subsection (c) of Section12 of Commonwealth Act 186, as thus amended and reamended, read as follows:

(c) Retirement is likewise allowed to a member, regardless of age, who has rendered at leasttwenty years of service. The benefit shall, in addition to the return of his personal contributionsplus interest and the payment of the corresponding employer's premiums described insubsection (a) of Section 5 hereof, without interest, be only a gratuity equivalent to one month'ssalary for every year of service, based on the highest rate received, but not to exceed twenty-four months; Provided, That the retiring officer or employee has been in the service of the saidemployer or office for at least four years, immediately preceding his retirement.

xxx xxx xxx

The gratuity is payable by the employer or office concerned which is hereby authorized toprovide the necessary appropriation to pay the same from any unexpended items ofappropriations.

Elective or appointive officials and employees paid gratuity under this subsection shall beentitled to the commutation of the unused vacation and sick leave, based on the highest ratereceived, which they may have to their credit at the time of retirement.
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Jose Consuegra died on September 26, 1965, and so at the time of his death he had acquired rights under theabove-quoted provisions of subsection (c) of Section 12 of Com. Act 186, as finally amended by Rep. Act 3836on June 22, 1963. When Consuegra died on September 26, 1965, he had to his credit 22.5028 years of servicein the government, and pursuant to the above-quoted provisions of subsection (c) of Section 12 of Com. Act 186,as amended, on the basis of the highest rate of salary received by him which was P282.83 per month, he wasentitled to receiveretirement insurance benefits in the amount of P6,304.47. This is the retirement benefits thatare the subject of dispute between the appellants, on the one hand, and the appellee Rosario Diaz, on the other,in the present case. The question posed is: to whom should this retirement insurance benefits of JoseConsuegra be paid, because he did not, or failed to, designate the beneficiary of his retirement insurance?

If Consuegra had 22.5028 years of service in the government when he died on September 26, 1965, it followsthat he started in the government service sometime during the early part of 1943, or before 1943. In 1943 Com.Act 186 was not yet amended, and the only benefits then provided for in said Com. Act 186 were those thatproceed from alife insurance .Upon entering the government service Consuegra became a compulsorymember of the GSIS, being automatically insured on his life, pursuant to the provisions of Com. Act 186 whichwas in force at the time. During 1943 the operation of the Government Service Insurance System wassuspended because of the war, and the operation was resumed sometime in 1946. When Consuegra designatedhis beneficiaries in his life insurance he could not have intended those beneficiaries of his life insurance as alsothe beneficiaries of his retirement insurance because the provisions on retirement insurance under the GSIScame about only when Com. Act 186 was amended by Rep. Act 660 on June 16, 1951. Hence, it cannot be saidthat because herein appellants were designated beneficiaries in Consuegra's life insurance they automaticallybecame the beneficiaries also of his retirement insurance. Rep. Act 660 added to Com. Act 186 provisionsregarding retirement insurance, which are Sections 11, 12, and 13 of Com. Act 186, as amended. 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 beneficiariesas recorded in the application for retirementannuity filed with the System shall be paid his ownpremiums with interest of threeper centum per annum, compounded monthly. If on his death heis eligible for retirement, then the automatic retirementannuity or the annuity chosen by himpreviously shall be paid accordingly.

The above-quoted provisions of subsection (b) of Section 11 of Commonwealth Act 186, as amended by Rep.

Act 660, clearly indicate that there is need for the employee to file an application for retirement insurancebenefits when he becomes a member of the GSIS, and he should state in his application the beneficiary of hisretirement insurance. Hence, the beneficiary named in the life insurance does not automatically become thebeneficiary in the retirement insurance unless the same beneficiary in the life insurance is so designated in theapplication for retirement insurance.

Section 24 of Commonwealth Act 186, as amended by Rep. Act 660, provides for a life insurance fund and for aretirement insurance fund. There was no such provision in Com. Act 186 before it was amended by Rep. Act660. Thus, subsections (a) and (b) of Section 24 of Commonwealth Act 186, as amended by Rep. Act 660, partlyread as follows:

(a) Life insurance fund.This shall consist of all premiumsfor life insurance benefit and/orearnings and savings therefrom. It shall meet death claims as they may arise or such equities as

any member may be entitled to, under the conditions of his policy, and shall maintain therequired reserves to the end of guaranteeing the fulfillment of the life insurance contracts issuedby the System ...

(b)Retirement insurance fund.This shall consist of all contributions forretirement insurancebenefit and of earnings and savings therefrom. It shall meetannuity payments and establish

the required reserves to the end of guaranteeing the fulfillment of the contracts issued by theSystem. ...

Thus, We see that the GSIS offers two separate and distinct systems of benefits to its members one is thelifeinsurance and the other is the retirement insurance. These two distinct systems of benefits are paid out fromtwo distinct and separate funds that are maintained by the GSIS.

In the case of the proceeds of a life insurance, the same are paid to whoever is named the beneficiary in the lifeinsurance 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 alife insurance may designate any person as beneficiary unless disqualified to be so under the provisions of theCivil Code.

4And 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.
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Retirement insurance is primarily intended for the benefit of the employee to provide for his old age, orincapacity, after rendering service in the government for a required number of years. If the employee reaches theage of retirement, he gets the retirement benefits even to the exclusion of the beneficiary or beneficiaries namedin his application for retirement insurance. The beneficiary of the retirement insurance can only claim theproceeds of the retirement insurance if the employee dies before retirement. If the employee failed or overlookedto state the beneficiary of his retirement insurance, the retirement benefits will accrue to his estate and will begiven to his legal heirs in accordance with law, as in the case of a life insurance if no beneficiary is named in theinsurance policy.

It is Our view, therefore, that the respondent GSIS had correctly acted when it ruled that the proceeds of theretirement insurance of the late Jose Consuegra should be divided equally between his first living wife RosarioDiaz, on the one hand, and his second wife Basilia Berdin and his children by her, on the other; and the lowercourt did not commit error when it confirmed the action of the GSIS, it being accepted as a fact that the secondmarriage of Jose Consuegra to Basilia Berdin was contracted in good faith. The lower court has correctly appliedthe 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 factsand in the decision appealed from.

5In the recent case of Gomez vs. Lipana, L-23214, June 30, 1970,

6this

Court, in construing the rights of two women who were married to the same man a situation more or lesssimilar to the case of appellant Basilia Berdin and appellee Rosario Diaz held "that since the defendant's firstmarriage has not been dissolved or declared void the conjugal partnership established by that marriage has notceased. Nor has the first wife lost or relinquished her status as putative heir of her husband under the new CivilCode, entitled to share in his estate upon his death should she survive him. Consequently, whether as conjugalpartner in a still subsisting marriage or as such putative heir she has an interest in the husband's share in theproperty here in dispute.... " And with respect to the right of the second wife, this Court observed that althoughthe second marriage can be presumed to be void ab initio as it was celebrated while the first marriage was stillsubsisting, still there is need for judicial declaration of such nullity. And inasmuch as the conjugal partnershipformed by the second marriage was dissolved before judicial declaration of its nullity, "[t]he only lust andequitable solution in this case would be to recognize the right of the second wife to her share of one-half in theproperty acquired by her and her husband and consider the other half as pertaining to the conjugal partnership ofthe first marriage."

WHEREFORE, the decision appealed from is affirmed, with costs against petitioners-appellants. It is so ordered.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Castro, Fernando, Teehankee, Barredo, Villamor andMakasiar, JJ., concur.

2. Death as the suspensive condition

Fernandez vs. National, 105 Phil 59

[G.R. No. L-9146. January 27, 1959.]

TERESA VDA. DE FERNANDEZ, ET AL., Plaintiffs-Appellants, v. THE NATIONAL LIFE

INSURANCE COMPANY OF THE PHILIPPINES, Defendant-Appellee.

Jose G. Macatangay for Appellants.

E. V. Filamor for Appellee.

SYLLABUS

1. INSURANCE;LIFE INSURANCE POLICY WHEN MATURES.In life insurance, the policy matureeither upon the expiration of the term set forth therein, in which case its proceeds are immediately payable to theinsured himself, or upon his death occurring at any time prior to the expiration of such stipulated term, in which

case, the proceeds are payable to his beneficiary, within sixty days after their filing of proof of death (Sec. 91-A

Insurance Law.)

2. ID.; ID.;It is the happening of the suspensive condition of death that renders a life policy matured and notthe filing of proof of death which is merely procedural.

3. ID.; LIFE POLICY MATURED DURING JAPANESE OCCUPATION; PAYMENT UNDERBALLANTYNE SCALE OF VALUES.An insurance life policy which matured and was payable during the
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Japanese occupation under the doctrine in Valero v. Sycip, G. R. No. L-11119, May 23, 1958, payment shouldbe adjusted in accordance with the Ballantyne scale of Values.

D E C I S I O N

ENDENCIA, J.:

Appeal from a decision of the Court of First Instance of Manila applying the Ballantyne scale of values upon theproceeds of life insurance taken and maturing during the Japanese occupation but claimed after liberation.

It is undisputed that on July 15, 1944, the NationalLife Insurance Company of the Philippines insured the lifeof Juan D. Fernandez for the sum of P10,000 under Policy No. 16346 upon payment by the latter of the amount

of P444 for the period from July 15, 1944, to July 14, 1945, the beneficiaries thereof being his mother TeresaDuat Vda. de Fernandez and his sisters Maria Teresa Fernandez and Manuela Fernandez. The insured died on

November 2, 1944, at Muntinglupa, Rizal, while the policy was in force.

After a lapse of more than seven years, or on August 1st, 1952, Atty. Alberto L. de la Torre, in representation ofthe beneficiaries, wrote the company advising it that the insured had died in 1944, and claimed the proceeds ofthe policy. On August 21, 1952, the company answered Atty. De la Torre stating that inasmuch as the status of

the policies issued during the Japanese occupation was still pending consideration before the courts, it would liketo know whether the beneficiaries represented by him were willing to compute the value of their claim under theBallantyne scale of values. There was no reply to this inquiry, but on July 9, 1954, the beneficiaries presentedinstead proofs of death of the insured and at the same time filed Statement Exhibit G claiming the amount ofP10,000. On July 21, 1954, the company advised the beneficiaries that inasmuch as the policy matured upon the

death of the insured on November 2, 1944, the proceeds should be computed in accordance with the Ballantynescale, which amount only to P500. In view of this, the beneficiaries commence suit on August 6, 1954, but the

lower court sustained the stand of the company and dismissed the complaint, awarding however to plaintiffs the

sum of P500 in Philippine currency, without interest; hence the appeal.

Appellants vigorously maintain that the obligation of the company to pay the proceeds of the insurance accruednot upon the death of the insured on November 2, 1944, but only upon receipt and approval by the company, at

its Home Office, of proof of death of the insured, which was on July 9, 1954, in accordance with the provision ofthe policy which reads

"National LifeInsurance Company of the Philippines hereby agrees to pay at its Home Office, Manila, TenThousand Pesos to Juan D. Fernandez (hereinafter called the insured) on the 15th day of July, 1964, if the

Insured is living and this Policy is in force, or upon receipt and approval at its Home Office of due proofs of thetitle of the claimant and of the prior death of the Insured while this Policy is in force to Teresa Duat Vda. deFernandez, Maria T. and Manuela Fernandez, mother and sisters respectively of the Insured (hereinafter called

the Beneficiary) subject to the right of the Insured to change the beneficiary as stated on the second page of thisPolicy." cralaw virtua1aw library

The above stipulation is apparently based on Sec. 91-A of the Insurance Law which provides as follows: jgc:chanrobles.com.ph

"The proceeds of alife insurance policy shall be paid immediately upon maturity of the policy, unless suchproceeds are made payable in installment or as an annuity, in which case the installments or annuities shall be

paid as they become due: Provided, however, That in case of a policy maturing by the death of the insured, theproceeds thereof shall be paid within sixty days after presentation of the claim and filing of the proof of the death

of the insured. Refusal to pay the claim within the time prescribed herein will entitle the beneficiary to collectinterest on the proceeds of the policy for the duration of the delay at the rate of six per centum per annum, unlesssuch failure or refusal to pay is based on the ground that the claim is fraudulent . . . ." cralaw virtua1aw library

Buttressed on the foregoing provision of law and the aforequoted stipulation as well as on the allegation that the

filing of proof of death by the beneficiaries is a condition precedent to the demandability of the obligation of theinsurer to pay the proceeds, appellants claim that they should be paid P10,000 in Philippine currency and notunder the Ballantyne scale of values.

We find appellants contention untenable. In life insurance, the policy matures either upon the expiration of the

term set forth therein in which case its proceeds are immediately payable to the insured himself, or upon his
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death occurring at any time prior to the expiration of such stipulated term, in which case, the proceeds arepayable to his beneficiaries within sixty days after their filing of proof of death (Sec. 91-A Insurance Law). In

the case at bar, the policy matured upon the death of the insured on November 2, 1944, and the obligation of theinsurer to pay arose as of that date. The sixty-day period fixed by law within which to pay the proceeds after

presentation of proof of death is merely procedural in nature, evidently to determine the exact amount to be paidand the interest thereon to which the beneficiaries may be entitled to collect on case of unwarranted refusal of the

company to pay, and also to enable the insurer to verify or check on the fact of death which it may even validlywaive. It is the happening of the suspensive condition of death that renders a life policy mature and not the filingof proof of death which, as above stated, is merely procedural, for even if such proof were presented but it turnsout later that the insured is alive, such filing does not give maturity to the policy. The insured having died on

November 2, 1944, during the Japanese occupation, the proceeds of his policy should be adjusted accordingly,for

"The rule is already settled that where a debtor could have paid his obligation at any time during the Japanese

occupation, payment after liberation must be adjusted in accordance with the Ballantyne schedule (De Asis v.Agdamag, 90 Phil,. 249; Ang Lam v. Peregrina, 92 Phil., 506; Wilson v. Berkenkotter, 92 Phil., 918; 49 Off.

Gaz. No. 4 1401; Samson v. Andal de Aguila, 94 Phil., 402)." (Valero v. Sycip, L-11119. May 23, 1958.)

Appellants vehemently invoke our ruling in the case of Salvacion B. Londres v. The NationalLife InsuranceCompany of the Philippines, 94 Phil., 647, wherein, although the policy mature during the Japaneseoccupation, we allowed the proceeds to be paid in the present legal tender. That case, however, is not applicable

to the present. In that case the insured, Jose Londres, and his two sons were massacred by Japanese soldiers onFebruary 7, 1945, while the battle for the liberation of Manila was still raging and downtown offices, includingthat of the appellee, were closed for the duration. Thus we declared: jgc:chanrobles.com.ph

"It may therefore be said that the policy became due when the city of Manila was still under the yoke of the

enemy and became payable only after liberation which took place on March 10, 1945, when President Osmeaissued Proclamation No. 6 following the restoration of the civil government by General Douglas MacArthur.And we say that the policy became payable only after liberation even if it matured sometime before that

eventuality theinsurance company ,appellant herein, was not yet in a position to pay the value of the policy for

the simple reason that it has not yet reopened. . . . ." cralaw virtua1aw library

In the present case the Home Office of the appellee was open for business until the last days of January, 1945,and had business transactions not only with the bank but also with its customers before its closure, and as a

matter of fact had been making payments of claims as they were presented. The policy in question havingmatured on November 2, 1944, same could have been processed and paid before the company closed its HomeOffice in January, 1945. Appellants argue that they could not have presented their claim and proof of deathduring the Japanese occupation even if they wanted to because they knew that the deceased was insured onlyafter liberation when the policy was handed to them by Mr. Pablo P. Gabriel, a business partner of the deceased.

The delay in the presentation of proof of death does not make any difference, for it does not alter the date ofmaturity of the policy nor the ability of the company to pay the proceeds of the insurance during the Japaneseoccupation. Moreover, it is through no fault of the company that such delay was incurred. At any rate,

irrespective of whether there was delay or not in the filing of proof of death, the hard fact remains that the policymatured and was payable during the Japanese occupation, and under the doctrine in the Valero v. Sycip case,supra, payment should be adjusted in accordance with the Ballantyne scale of values.

Finding no error in the decisions appealed from, and there being no question raised as to the adjusted amount ofP500 under the Ballantyne schedule, judgment affirmed with costs.

Paras, C.J., Bengzon, Padilla, Montemayor, Bautista Angelo, Labrador, Concepcion and Reyes, J.B.L., JJ.,concur.

Vda de Gabriel vs. CA, 264 SCRA 137

Vda. De Gabriel v. CAG.R. No. 103883 November 14, 1996

Vitug, J.FACTS:

M a r c e l i n o G a b r i e l w a s e m p l o y e d b y E m e r a l d C o n s t r u c t i o n &D e v e l o p m e n t Corporation (Emerald Construction for brevity) at its construction project in
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Iraq. He was covered by a personal accident insurance in the amount of P100,000.00 under agroup policy procured from Fortune Insurance & Surety Company (Fortune Insurance for brevity)by Emerald

Construction for its overseas workers. The insured risk was for bodily injury caused by violentaccidental external and visible means which injury would solely and independently of any othercause result in death or disability. On 22 May 1982, within the lif e of t he poli cy, Gabr iel died in Iraq .On 12 July 1983,Emerald Construction reported Gabriels death to Fortune Insurance by telephone. Among

t he doc ume n t s t he re a f t e r submi t t e d t o For tune Insu ra nc e we re a c opy o f t he de a thcertificate issued by the Ministry of Health of the Republic of Iraq which stated that an autopsyreport by the National Bureau of Investigation was conducted to the effect that due to advanced state of

postmortem decomposition,the cause of death of Gabriel could not be determined (emphasis added)

.Be c a use o f t h i s de ve lopme n t For tun e Insu ra nc e u l t i ma te ly de n i e d t he c l a im

o f Emerald Construction on the ground of prescription. Gabriels wido w, Jacqueline Jimenez,went to the to the lower court. In her complaint against Emerald Construction and Fortune Insurance, she averred

that her husband died of electrocution while in the performance of his work. For tune Insurance al leged thatsince both the death certificate issued by the Iraqi Ministry of Health and the autopsy report of the NBI

failed to disclose the cause of Gabriels death, it denied liability under the policy. In addition, private respondentraised the defense of prescription, invoking Section 384 of the Insurance Code.

ISSUE:WON Jacqueline Jimenez vda. de Gabriels claim against Fortune Insurance should be denied on the ground of

prescription

HELD:

Yes. Section 384 of the Insurance Code provides: Sec. 384. Any person having any claim upon the policy issuedpursuant to th is chapter shal l, wi thout any unnece ssary de la y, present to the in su rance company

conce rned a wri tt en notice of cla im set ting forth the nature, extent and duration of the injuries sustainedas certified by a du ly l i cen sed phy sic ian . N oti ce o f c la i m mu st be f i l ed wit hin s i xm o n t h s f r o m d a t e o f t h e a c c i d e n t , o t h e r w i s e , t h e c l a i m s h a l l b e deemed

waived. Acti on or sui t for recovery of damage due to loss or injury must be brought, in proper cases,

with the Commissioner or the Co ur t s wi t h i n on e ye a r f r o m d e n i a l o f t h e c l a i m ,o t h e r w i s e , t h e claimants right of action shall prescribe.

The notice of death was given to Fortune Insurance, concededly, more than a year after the death

of vda. de Gabriels husband. Fortune Insu rance, in invoking prescription.was not referring to the one-year period from the denial of the claim within which to file an a c t i o n a ga ins tan ins ure r b ut obv iou sl y t o t he wri t te n n ot i ce of c la im th at had to be submitted within sixmonths from the time of the accident. Vda. de Gabriel argues that Fortune Insurance must be deemed to havewaived its right to show that the cause of death is an excepted peril, by failing to have its answers duly ve ri fi ed .

It is t rue that a matt er of which a writt en reque st for admission is made shal l be deemed impliedlyadmitted unless, within a period designated in the request, which shall not be less than 10 days after service

thereof, or within such further time as the court may allow on motion and notice, the party to whom the request isdirected serves upon the party requesting the admission a sworn statement either denying specifically the mattersof which an admission is requested or setting forth in detail the reasons why he cannot truthfullyeither admit or deny those matters; however, the verification, like in most cases required by the rules of

procedure, is a formal, not jurisdictional, requirement, and mainly intended to secure an assurance that matterswhich are alleged are done in good faith or are true and correct and not of mere specu lation.

Whe n c ircumstances warrant , t he court may simpl y order the correction of unverified pleadings or act onit and waive strict compliance with the rules in order tha t the ends of ju stice may the reby be served. In

the case of answers to wri t t en requ es t s for admis s ion par t i cu la r ly , the cour t ca n a l lowt he p ar t y ma k in g t he admission, whether made expressly or deemed to have been made impliedly, towithdraw or amend it upon such terms as may be just. The insurance policy expressly provided that to be compensable,

the injury or death should be caused by violent accidental external and visible means.

In attempting to prove the cause of her husbands death, all that vda. de Gabriel could submit were a letter sent toher by her husbands co-worker, stating that Gabriel died when he tried to haul water out of a tank while its

submerged motor was still functioning, and vda. de Gabriels sworn affidavit.The said affidavit, however,suffers from procedural infirmity as it was not even testified to or identified by vda. de Gabriel herself. Thisaffidavit therefore is a mere hearsay under the law.In like manner, the letter allegedly written by the deceaseds

co-worker which was never identi fied to in court by the supposed au thor, suffe rs f rom the same


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defect as the affidavit of vda. de Gabriel. Not one of the other documents submitted, to wit, thePOEA decision, the death certificate issued by the Ministry of Health of Iraq and the NBI autopsy report, could

give any probative value to vda. de Gabriels claim. The POEA decision did not make any categorical holding onthe specific cause of Gabriels death.In summary, evidence is utterly wanting to establish that the insuredsuffered from an accidental death, the risk covered by the policy.

3. Proof of death vs. Notice of death

Londrez vs. National, 94 Phil 627

G.R. No. L-5921 March 29, 1954

SALVACION B. LONDRES,plaintiff-appellee,vs.

THE NATIONAL LIFE INSURANCE COMPANY OF THE PHILIPPINES,defendant-appellant.

Vicente M. Custodio for appellee.E. V. Filamor for appellant.

BAUTISTA ANGELO, J.:

This is an appeal from a decision of the Court of First Instance of Manila ordering defendant to pay to plaintiff

the sum of P3,000, Philippine currency, plus legal interest thereon from the time of the filing of the complaintuntil its full payment.

On April 14, 1943, the National Life Insurance Company of the Philippines issued a policy on the life of Jose C.

Londres whereby it undertook to pay its beneficiary upon his death the sum of P3,000. All the premiums dueunder the policy were actually paid on their dates of maturity and the policy was in force when the insured diedon February 7, 1945. Salvacion V. Londres, as beneficiary, demanded from the company the payment of the

proceeds of the policy, and her demand having been refused, she instituted the present action against thecompany in the Court of First Instance of Manila.

Defendant and its answer denied, for lack of sufficient proof, the allegation that the insured died on February 7,

1945, and set up the following special defenses: (a) that plaintiff's claim is covered by the Moratorium Law; (b)that the policy having been issued during the Japanese occupation, it is presumed that its face value should be

paid in Japanese currency, there being no provision in the policy from which can be inferred that the partiescontemplated payment in any other currency; (c) that the money paid by the insured as premiums, together withthe money received from other policy-holders, was all deposited by the defendant in the Philippine NationalBank and said deposit was declared without value by Executive Order No. 49 of the President of the Philippines;and (d) that the policy having been issued under abnormal circumstances, it should be considered in the light of

equity which does not permit anyone to enrich himself at the expense of another. Defendant, however, as a proofof good faith, offered to pay the value of the policy in accordance with the Ballantyne scale of values, or the sumof P2,400, Philippine currency.

On April 15, 1952, plaintiff filed a motion for summary judgment supported by an affidavit which contains a

restatement of the allegations of the complaint attaching thereto in support of the motion certain annexes andaffidavits which are intended to substantiate and prove said allegations. Defendant, answering this motion, statedthat while it joins the plaintiff in her petition for summary judgment, it does so only in so far as its defense ofmoratorium is concerned, but not as regards the merits of the case because its answer raises questions of fact

which should be established, not by mere affidavits, but by evidence duly presented in court. And on May 15,1952, the court rendered decision not only on the question of moratorium but on the merits of the case,apparently disregarding the issue raised by defendant as regards the necessity of presenting evidence on the facts

controverted by it in its answer. From this decision, the defendant has appealed.

One of the errors assigned by appellants refers to the fact that the lower court rendered judgment on the merits byvirtue merely of the motion for summary judgment filed by appellee without giving an opportunity to appellant

to present evidence on the facts which, it alleges, its answer and special defenses are predicated. Appellantcontends that the facts raised by its special defenses are "triable issues of facts" which cannot be the subject of


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summary judgment unless established by sufficient evidence, and that those facts are material to sustain its pointof view that it can only be made to pay under the policy an indemnity in the amount of P2,400.

When appellee filed a motion for summary judgment upon her claim she attached thereto in support of the

motion certain annexes and affidavits which were intended to substantiate and prove her allegations. Appellantfailed not only to interpose opposing affidavits but announced to the court that it was joining the appellee in her

petition for summary judgment although it evinced its desire to present evidence with regard to the questions offacts raised in its special defenses. And acting on said motion, the lower court, after considering the pleadings

and affidavits submitted in support of the motion for summary judgment, found that there was no substantialtriable issue of facts and concluded that the appellee was entitled to a judgment as a matter of law. We find thisto be in substantial compliance with the rules (sections 1 and 2, Rule 36).

The material averments of the claim as regards the execution of the policy, the payment of the premiums, and the

death of the insured, are not disputed. The only issues of fact which served as basis for the opposition to thesummary judgment are those raised in the special defenses contained in the answer. But these facts are not

material for a decision on the merits, as correctly stated by the lower court, for even if they are taken for grantedthe result would not materially change the findings as to the question affecting the main claim. We hold thereforethat the lower court did not err in rendering a summary judgment on the merits of the case.

The issue of moratorium, which was decided against the stand taken by appellant, and which is also raised as oneof the errors, has now moot in view of the ruling in the case of Rutter vs. Esteban, 93 Phil., 68, wherein theMoratorium Law as declared invalid and unconstitutional.

The main question to be determined refers to the amount to be paid by appellant under the policy by way ofindemnity to the insured. Stated in another way, the question to be determined is whether the amount of P3,000which appellant bound itself to pay to the insured under the policy upon his death should be paid in accordance

with the present currency or should be adjusted under the Ballantyne scale of values. The answer to the questionwould depend upon the interpretation to be placed on the facts surrounding the death of the insured.

It appears that the deceased took up the policy under consideration on April 15, 1943 for the sum of P3,000. All

the premiums due under the policy were actually paid on their dates of maturity and the policy was in force whenthe insured died on February 7, 1945. On said date, the battle of the liberation of the City of Manila was stillraging. While the northern part may have been liberated, not so the southern part, as shown from the very

affidavits submitted by appellee wherein it was stated that on the aforesaid date, the insured, Jose Londres, andhis two sons were taken by the Japanese soldiers from their house at Singalong Street and were massacred by

their captors. It may therefore be said that the policy became due when the City of Manila was still under theyoke of the enemy and became payable only after liberation which took place on March 10, 1945 when PresidentOsmea issued Proclamation No. 6 following the restoration of the civil government by General Douglas Mac

Arthur. And we say that the policy became payable only after liberation even if it matured sometime before,because before that eventuality the insurance company, appellant herein, was not yet in a position to pay the

value of the policy for the simple reason that it had not yet reopened. This much the court can take judicial noticeof, for during those days of liberation, while the people were rejoicing because of the happy event, the banks, theinsurance companies, and for that matter other commercial and business firms, were still feeling the adverse

effects of the sudden fall of values and were uncertain and apprehensive as to the manner the readjustment wouldbe made by the new Government. It is for this reason that the beneficiary, after realizing the truth about the deathof her husband, and after gathering evidence to substantiate his death, had difficulty in effecting the collection ofher claim from the insurance company because at that time it had not yet reopened for business purposes.Although the record does not disclose the exact date on which the insurance company reopened for this purpose,

this Court can take judicial notice that it only did so after liberation. At that time the legal tender was already thepresent currency.

However, it is an undisputed fact that the beneficiary submitted to the company formally her claim and

demanded payment thereof on May 16, 1949, attaching thereto sufficient proof of the death ofthe insured ,which claim however the company did not entertain, not because the proof submitted was not sufficient incontemplation of law, but because the policy was executed during the occupation and the determination of itsvalue has not yet been passed upon by the Government. And following the provisions of our Insurance Law tothe effect that in case of maturity by death, the conclusion is inescapable that from the point of view of the

insurance company ,the proceeds of the policy became payable only upon the expiration of that period.(Insurance Law, Section 91-A). In this sense, this case may be likened to those already decided by this Court

wherein we said in substance that, where the parties have agreed that the payment of the obligation will be madein the currency that would prevail by the end of the stipulated period, and this takes place after liberation, the
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obligation shall be paid in accordance with the currency then prevailing, or Philippine currency. (Roo vs.Gomez, 83 Phil., 890, 46 Off. Gaz., Sup. 111, 339; Gomez vs.Tabia, 84 Phi;., 269, 47, Off. Gaz., 641.) We are,

therefore, persuaded to conclude, on the strength of these authorities, that the present claim should be paid inaccordance with the present legal tender, or the Philippine currency.

With regard to the sufficiency of the proof presented by appellee as to the death of the insured, we find that the

same has been sufficiently established in view of the death certificate issued by the Civil Register of Manila onApril 15, 1952, which was attached to the motion for summary judgment. This certificate strengthens the proof

submitted by appellee on May 16, 1949 and as such it can serve as basis for the determination of the interest thatthe company should pay under the policy as required by law. (Insurance Law, Section 91-A). However, the lowercourt, contrary to the claim of appellant, only required said appellant to pay legal interest from the filing of the

complaint until the payment of the judgment.

As final plea, appellant invokes equity in its favor in view of the nullification of the deposits made by it with thePhilippine National Bank of all fiat money received from its policyholders, which money was declared without

value by Executive Order No. 49 of the President of the Philippines. Appellant claims that, considering theunexpected circumstances that developed, the indemnity to be paid by it should be suffered by it under Article307 of the Code of Commerce which provides: "When the deposits are of cash, with a specification of the coins

constituting them, . . . the increase or reduction which their value may suffer shall be for the account of thedepositor." Moreover, appellant, by entering into an insurance contract, cannot claim, if it suffers loss, that the

beneficiary cannot enrich herself at its expense. This is a risk attendant to any wagering contract.1One whogambles and loses cannot be heard to complain of his loss. To appellant, we can only repeat the followingadmonition:

"The parties hereingambled and speculated on the date of the termination of the war and the liberation of thePhilippines by the Americans. This can be gleaned from the stipulation about redemption, particularly that

portion to the effect that redemption could be effected not before the expiration of one year from June 24, 1944.

This kind of agreement is permitted by law. We find nothing immoral or unlawful in it." (Gomez vs.Tabia,supra.)

Wherefore, the decision appealed from is affirmed, with costs against appellant.

Bengzon, Reyes, Jugo, Labrador, Concepcion and Diokno, JJ.,concur.

Paras, C.J.,concurs in the result.

4. Facility of payment clause228 (f), 321 in relation to 230 (m)

Sec. 228. No policy of group life insurance shall be issued and delivered in thePhilippines unless it contains in substance the following provisions, or

provisions which in the opinion of the Commissioner are more favorable tothe persons insured, or at least as favorable to the persons insured and morefavorable to the policy-holders:

(f) A provision that any sum becoming due by reason of death of the personinsured shall be payable to the beneficiary designated by the insured, subject tothe provisions of the policy in the event that there is no designated beneficiary, asto all or any part of such sum, living at the death of the insured, and subject toany right reserved by the insurer in the policy and set forth in the certificate topay at its option a part of such sum not exceeding five hundred pesos to anyperson appearing to the insurer to be equitably entitled thereto by reason ofhaving incurred funeral or other expenses incident to the last illness or death ofthe person insured;

Sec. 321. Any applicant who misrepresents or omits any material fact in his applicationfor registration as a non-life company underwriter, or commits any dishonestact in taking or in connection with the qualifying written examination forunderwriters, shall be barred from being registered as such non-life companyunderwriter and, if already registered, his registration shall be cancelled and
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the certificate of registration issued in his favor shall be recalled immediatelyby the Commissioner.

In the event that the certificate of authority of a non-life insurance companyto transact business is suspended or revoked due to business failure arisinglargely from the imprudent and injudicious acceptance of risks by theunderwriter concerned, the registration of such underwriter shall likewise be

cancelled and his certificate of registration shall be recalled by theCommissioner, and no similar certificate shall thereafter be issued in hisfavor.

Sec. 230. In the case of industrial life insurance, the policy shall contain in substancethe following provisions:

(m) A space on the front or the back of the policy for the name of the beneficiarydesignated by the insured with a reservation of the insured's right to designate orchange the beneficiary after the issuance of the policy. The policy may alsoprovide that no designation or change of beneficiary shall be binding on theinsurer until endorsed on the policy by the insurer, and that the insurer mayrefuse to endorse the name of any proposed beneficiary who does not appear tothe insurer to have an insurable interest in the life of the insured. Such policymay also contain a provision that if the beneficiary designated in the policy doesnot surrender the policy with due proof of death within the period stated in thepolicy, which shall not be less than thirty days after the death of the insured, or ifthe beneficiary is the estate of the insured, or is a minor, or dies before theinsured, or is not legally competent to give valid release, then the insurer maymake any payment thereunder to the executor or administrator of the insured, orto any of the insured's relatives by blood or legal adoption or connections bymarriage or to any person appearing to the insurer to be equitably entitled theretoby reason of having incurred expense for the maintenance, medical attention orburial of the insured; and

II. In non-life Insurance243244, 88-91

Sec. 243. The amount of any loss or damage for which an insurer may be liable, underany policy other than life insurance policy, shall be paid within thirty daysafter proof loss is received by the insurer and ascertainment of the loss ordamage is made either by agreement between the insured and the insurer or byarbitration; but if such ascertainment is not had or made within sixty daysafter such receipt by the insurer of the proof of loss, then the loss or damageshall be paid within ninety days after such receipt. Refusal or failure to pay theloss or damage within the time prescribed herein will entitle the assured to

collect interest on the proceeds of the policy for the duration of the delay atthe rate of twice the ceiling prescribed by the Monetary Board, unless suchfailure or refusal to pay is based on the ground that the claim is fraudulent.

Sec. 244. In case of any litigation for the enforcement of any policy or contract ofinsurance, it shall be the duty of the Commissioner or the Court, as the casemay be, to make a finding as to whether the payment of the claim of theinsured has been unreasonably denied or withheld; and in the affirmative case,the insurance company shall be adjudged to pay damages which shall consist ofattorney's fees and other expenses incurred by the insured person by reason ofsuch unreasonable denial or withholding of payment plus interest of twice theceiling prescribed by the Monetary Board of the amount of the claim due theinsured, from the date following the time prescribed in section two hundred

forty-two or in section two hundred forty-three, as the case may be, until theclaim is fully satisfied; Provided, That the failure to pay any such claim withinthe time prescribed in said sections shall be considered prima facie evidence ofunreasonable delay in payment.

NOTICE OF LOSS

Sec. 88. In case of loss upon an insurance against fire, an insurer is exonerated, ifnotice thereof be not given to him by an insured, or some person entitled tothe benefit of the insurance, without unnecessary delay.


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Sec. 89. When a pre

part four - insurance

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