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Perez v. CA Gr No. 112329 January 28, 2000

FACTS: Primitivo Perez had been insured with BF Lifeman Insurance Corporation.

Rodolfo Lalog, the agent of the insurance, visited Perez in Guinayangan, Quezon andconvinced him to apply for additional insurance to avail of a promotional discount ifthe premium were paid annually.

Primitivo, after filling the application form, through his wife, paid Lalog, and the latterindicated that the amount received was a deposit. Lalog lost the application form

accomplished by Primitivo and later on asked to fill up another application form.Perez was also made to undergo the required medical examination.

Lalog, pursuant to the procedures of the company, forwarded the application foradditional insurance of Perez, together with its supporting papers, to the office inGumaca, Quezon which was supposed to forward the papers to Manila.

Perez died in an accident while riding a banca capsized during a storm. At the time ofhis death, the application was still in Gumaca. Without knowing that Perez died, BFLifeman Insurance approved the application and issued the corresponding policy.

Petitioner Virginia Perez went to Manila to claim the benefits under the insurancepolicies. She was paid for the first but not with the additional policy coverage.

According to the insurance company, it was not perfected at the time of death ofPrimitivo and refunded the amount which his wife paid. BF Lifeman filed a complaintagainst Perez seeking the rescission and declaration of nullity of the insurancecontract.

ISSUE:1. Whether or not the insurance contract was perfected2. Whether or not the condition imposed that the policy must have been deliveredto and accepted is null and void

HELD:

1. Insurance is a contract whereby for a stipulated consideration, one partyundertakes to compensate for the loss on a specified subject by specific perils. WhenPrimitvo filed the application for insurance, and paid partially the premium, andsubmitted the results of his medical examination, his application was subject to theacceptance of BF Lifeman Insurance Corporation.

The assent of BF Lifeman Insurance was not given when it merely received the

application form and all the supporting papers. Its assent was given when it issues acorresponding policy to the applicant. It is only when the applicant pays the premiumand receives and accepts the policy while he is in good health that the contract isdeemed to have been perfected.

2. The condition imposed by the corporation (a policy must have been issued, the

premiums paid and the policy must have been delivered to and accepted byapplicant) can hardly be considered potestative or facultative condition. The health of

the applicant at the time of the delivery of the policy is beyond the control/will of theinsurance company. Rather, it is a suspensive one whereby the acquisition of rightsdepends upon the happening of an event which constitutes the condition.

A contract of insurance, like other contracts, must be assented to by both partieseither in person or by their agents. So long as an application for insurance has notbeen either accepted or rejected, it is merely an offer or proposal to make a contract.The contract, to be binding from the date of application, must have been a completedcontract, one that leaves nothing to be done, nothing to be completed, nothing to be

passed upon, or determined, before it shall take effect. There can be no contract ofinsurance unless the minds of the parties have met in agreement.

MELECIO COQUIA, MARIA ESPANUEVA and MANILA YELLOW TAXICAB CO.,INC. vs. FIELDMEN'S INSURANCE CO., INCG.R. No. L-23276 November 29, 1968

FACTS: On December 1, 1961, Fieldmens Insurance Company issued in favor ofManila Yellow Taxicab a common carrier accident insurance policy covering the periodof December 1, 1961 to December 1, 1962. While the policy was in force, or onFebruary 10, 1962, a taxicab of the Insured, driven by Carlito Coquia, met a vehicularaccident at Mangaldan, Pangasinan, in consequence of which Carlito died. The

Insured filed therefor a claim for P5,000.00 to which the Company replied with anoffer to pay P2,000.00, by way of compromise. The Insured rejected the same andmade a counter-offer for P4,000.00, but the Company did not accept it. Hence, onSeptember 18, 1962, the Insured and Carlito's parents, namely, Melecio Coquia and

Maria Espanuevahereinafter referred to as the Coquiasfiled a complaint againstthe Company to collect the proceeds of the aforementioned policy. In its answer, theCompany admitted the existence thereof, but pleaded lack of cause of action on thepart of the plaintiffs. RTC ruled in favor of Coquias. CA ruled in favor of Coquiasagain.

ISSUE: Whether or not plaintiffs have the right of action to collect on policy

RULING: Yes. Athough, in general, only parties to a contract may bring an actionbased thereon, this rule is subject to exceptions, one of which is found in the secondparagraph of Article 1311 of the Civil Code of the Philippines, reading: "If a contractshould contain some stipulation in favor of a third person, he may demand itsfulfillment provided he communicated his acceptance to the obligor before itsrevocation. A mere incidental benefit or interest of a person is not sufficient. Thecontracting parties must have clearly and deliberately conferred a favor upon a third

person." This is but the restatement of a well-known principle concerning contractspour autrui, the enforcement of which may be demanded by a third party for whosebenefit it was made, although not a party to the contract, before the stipulation in hisfavor has been revoked by the contracting parties

In the case at bar, the policy under consideration is typical of contracts pour autrui

this character being made more manifest by the fact that the deceased driver paidfifty percent (50%) of the corresponding premiums, which were deducted from his

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weekly commissions. Under these conditions, it is clear that the Coquias who,admittedly, are the sole heirs of the deceasedhave a direct cause of action againstthe Company, and, since they could have maintained this action by themselves,

without the assistance of the insured it goes without saying that they could and didproperly join the latter in filing the complaint herein.