Filipinas Cia de Seguros v. Christern Huenfeld & Co.

- Enemy Corporation

80 PHIL 54

Facts:

> Oct. 1, 1941, Domestic Corp Christern, after payment of the premium, obtained from Filipinas,
fire policy no. 29333 for P100T covering merchandise contained in a building located in Binondo.

> On Feb. 27, 1942, during the Jap occupation, the building and the insured merchandise were
burned. Christern submitted to Filipinas its claim.

> Salvaged goods were sold and the total loss of Christern was P92T.

> Filipinas denied liability on the ground that Christern was an enemy corporation and cannot
be insured.

Issue:

Whether or not Filipinas is liable to Christern, Huenfeld & Co.

Held:

NO.
Majority of the stockholders of Christern were German subjects. This being so, SC ruled that
said corporation became an enemy corporation upon the war between the US and Germany.
The Phil Insurance Law in Sec. 8 provides that anyone except a public enemy may be insured. It
stands to reason that an insurance policy ceases to be allowable as soon as an insured becomes
a public enemy.

San Miguel Brewery v. Law Union Rock Insurance Company - Insurance Proceeds

40 PHIL 674

Facts:

> On Jan. 12, 1918, Dunn mortgaged a parcel of land to SMB to secure a debt of 10T.

> Mortgage contract stated that Dunn was to have the property insured at his own expense,
authorizing SMB to choose the insurers and to receive the proceeds thereof and retain so much
of the proceeds as would cover the mortgage debt.

> Dunn likewise authorized SMB to take out the insurance policy for him.

> Brias, SMBs general manager, approached Law Union for insurance to the extent of 15T upon
the property. In the application, Brias stated that SMBs interest in the property was merely that
of a mortgagee.

> Law Union, not wanting to issue a policy for the entire amount, issued one for P7,500 and
procured another policy of equal amount from Filipinas Cia de Seguros. Both policies were
issued in the name of SMB only and contained no reference to any other interests in the propty.
Both policies required assignments to be approved and noted on the policy.

> Premiums were paid by SMB and charged to Dunn. A year later, the policies were renewed.
> In 1917, Dunn sold the property to Harding, but no assignment of the policies was made to
the latter.

> Property was destroyed by fire. SMB filed an action in court to recover on the policies.
Harding was made a defendant because by virtue of the sale, he became the owner of the
property, although the policies were issued in SMBs name.

> SMB sought to recover the proceeds to the extent of its mortgage credit with the balance to
go to Harding.

> Insurance Companies contended that they were not liable to Harding because their liability
under the policies was limited to the insurable interests of SMB only.

> SMB eventually reached a settlement with the insurance companies and was paid the balance
of its mortgage credit. Harding was left to fend for himself. Trial court ruled against Harding.
Hence the appeal.

Issue:

Whether or not the insurance companies are liable to Harding for the balance of the proceeds of
the 2 policies.

Held:
NOPE.

Under the Insurance Act, the measure of insurable interest in the property is the extent to which
the insured might be daminified by the loss or injury thereof. Also it is provided in the IA that
the insurance shall be applied exclusively to the proper interest of the person in whose name it
is made. Undoubtedly, SMB as the mortgagee of the property, had an insurable interest therein;
but it could NOT, an any event, recover upon the two policies an amount in excess of its
mortgage credit.

By virtue of the Insurance Act, neither Dunn nor Harding could have recovered from the two
policies. With respect to Harding, when he acquired the property, no change or assignment of
the policies had been undertaken. The policies might have been worded differently so as to
protect the owner, but this was not done.

If the wording had been: Payable to SMB, mortgagee, as its interests may appear, remainder to
whomsoever, during the continuance of the risk, may become owner of the interest insured, it
would have proved an intention to insure the entire interest in the property, NOT merely SMBs
and would have shown to whom the money, in case of loss, should be paid. Unfortunately, this
was not what was stated in the policies.

If during the negotiation for the policies, the parties had agreed that even the owners interest
would be covered by the policies, and the policies had inadvertently been written in the form in
which they were eventually issued, the lower court would have been able to order that the
contract be reformed to give effect to them in the sense that the parties intended to be bound.
However, there is no clear and satisfactory proof that the policies failed to reflect the real
agreement between the parties that would justify the reformation of these two contracts.
FACTS:

Saura Import & Export Co Inc., mortgaged to the Phil. National Bank, a parcel of land.

The mortgage was amended to guarantee an increased amount, bringing the total mortgaged
debt to P37,000

On the land mortgage is a building owned by Saura Import & Export Co Inc. which was insured
with Philippine International Surety (Insurer) even before the mortgage contract so it was
required to endorse to mortgagee PNB

October 15, 1954: Barely 13 days after the issuance of the fire insurance policy, the insurer
cancelled it. Notice of the cancellation was given to PNB (mortgagee). But Saura (insured) was
not informed.

April 6, 1955: The building and all its contents worth P40,685.69 were burned so Saura filed a
claim with the Insurer and mortgagee Bank

RTC: dismissed

ISSUE: W/N Philippine International Surety should be held liable for the claim because notice to
only the mortgagee is not substantial

HELD:YES. Appealed from is hereby reversed. Philippine International Surety Co., Inc., to pay
Saura Import & Export Co., Inc., P29,000

It was the primary duty of Philippine International Surety to notify the insured, but it did not

If a mortgage or lien exists against the property insured, and the policy contains a clause stating
that loss, if any, shall be payable to such mortgagee or the holder of such lien as interest may
appear, notice of cancellation to the mortgagee or lienholder alone is ineffective as a
cancellation of the policy to the owner of the property.

liability attached principally the insurance company, for its failure to give notice of the
cancellation of the policy to Saura

it is unnecessary to discuss the errors assigned against appellee bank

G.R. No. 23703 September 28, 1925

Lessons Applicable:

Blood relationship (Insurance)

Revocable Designation (Insurance)

FACTS:

January 29, 1910: Sun Life Assurance Co. of Canada issued a 20-year endowment insurance
policy on the life of Hilario Gercio

insurance company agreed to insure the life of Gercio for the sum of P2,000, to be paid him on
February 1, 1930, or if the insured should die before said date, then to his wife, Mrs. Andrea
Zialcita, should she survive him; otherwise to the executors, administrators, or assigns of the
insured

policy did not include any provision reserving to the insured the right to change the beneficiary

End of 1919: she was convicted of the crime of adultery

September 4, 1920: a decree of divorce was issued

March 4, 1922: Gercio formally notified the Sun Life that he had revoked his donation in favor of
Andrea Zialcita, and that he had designated in her stead his present wife, Adela Garcia de Gercio,
as the beneficiary of the policy

Sun Life refused

Gercio filed a petition for mandamus to compel Sun Life

Trial Court: favored Gercio

ISSUE: W/N Gercio has the right to change the beneficiary of the policy

HELD: NO. Dismissed.

The wife has an insurable interest in the life of her husband.

The beneficiary has an absolute vested interest in the policy from the date of its issuance and
delivery. So when a policy of life insurance is taken out by the husband in which the wife is
named as beneficiary, she has a subsisting interest in the policy

applies to a policy to which there are attached the incidents of a loan value, cash surrender
value, an automatic extension by premiums paid, and to an endowment policy, as well as to an
ordinary life insurance policy.
If the husband wishes to retain to himself the control and ownership of the policy he may so
provide in the policy.

But if the policy contains no provision authorizing a change of beneficiary without the
beneficiary's consent, the insured cannot make such change.

Accordingly, it is held that a life insurance policy of a husband made payable to the wife as
beneficiary, is the separate property of the beneficiary and beyond the control of the husband.

effect produced by the divorce, the Philippine Divorce Law, Act No. 2710, merely provides in
section 9 that the decree of divorce shall dissolve the community property as soon as such
decree becomes final

absence of a statute to the contrary, that if a policy is taken out upon a husband's life the wife is
named as beneficiary therein, a subsequent divorce does not destroy her rights under the policy

Neither the husband, nor the wife, nor both together had power to destroy the vested interest
of the children in the policy.

Separate Opinion:

Johnson, Concurring Opinion:

I agree with the majority of the court, that the judgment of the lower court should be revoked,
but for a different reason. In my judgment, the action is premature and should have been
dismissed.

34774 September 21, 1931

Lessons Applicable: Pecuniary Interest (Insurance)

FACTS:

March 18, 1925: El Oriente, Fabrica de Tabacos, Inc. in order to protect itself against the loss that
it might suffer by reason of the death of its manager, A. Velhagen, who had more than 35 years
of experience in the manufacture of cigars in the Philippine Islands, and whose death would be a
serious loss procured from the Manufacturers Life Insurance Co., of Toronto, Canada, thru its
local agent E.E. Elser, an insurance policy on the life of A. Velhagen for $50,000

designated itself as the sole beneficiary

Upon the death of A. Velhagen in the year 1929, El Oriente received all the proceeds of the life
insurance policy, together with the interests and the dividends accruing thereon, aggregating
P104,957.88

Collector of Internal Revenue assessed and levied the sum of P3,148.74 as income tax on the
proceeds of the insurance policy which tax El Oriente paid

ISSUE: W/N proceeds of life insurance policies paid to corporate beneficiaries upon the death of
the insured are also exempted

HELD: YES. reversed and favoring El Oriente

In reality, what the plaintiff received was in the nature of an indemnity for the loss which it
actually suffered because of the death of its manager and not taxable income

NOT TAXABLE.

In Chapter I of the Tax Code, is to be found section 4 which provides that, "The following
incomes shall be exempt from the provisions of this law: (a) The proceeds of life insurance
policies paid to beneficiaries upon the death of the insured . . ." Section 10, as amended, in
Chapter II On Corporations, provides that, "There shall be levied, assessed, collected, and paid
annually upon the total net income received in the preceding calendar year from all sources by
every corporation . . .a tax of three per centum upon such income . . ." Section 11 in the same
chapter, provides the exemptions under the law, but neither here nor in any other section is
reference made to the provisions of section 4 in Chapter I.

Under the view we take of the case, it is sufficient for our purposes to direct attention to the
anomalous and vague condition of the law. It is certain that the proceeds of life insurance
policies paid to individual beneficiaries upon the death of the insured are exempt. It is not so
certain that the proceeds of life insurance policies paid to corporate beneficiaries upon the
death of the insured are likewise exempt. But at least, it may be said that the law is indefinite in
phraseology and does not permit us unequivocally to hold that the proceeds of life insurance
policies received by corporations constitute income which is taxable
It will be recalled that El Oriente, took out the insurance on the life of its manager, who had had
more than thirty-five years' experience in the manufacture of cigars in the Philippines, to protect
itself against the loss it might suffer by reason of the death of its manager. We do not believe
that this fact signifies that when the plaintiff received P104,957.88 from the insurance on the life
of its manager, it thereby realized a net profit in this amount. It is true that the Income Tax Law,
in exempting individual beneficiaries, speaks of the proceeds of life insurance policies as income,
but this is a very slight indication of legislative intention. In reality, what the plaintiff received
was in the nature of an indemnity for the loss which it actually suffered because of the death of
its manager.

G.R. No. L-6114 October 30, 1954

Lessons Applicable: Invalid Designation (Insurance)

FACTS:

Roman A. Concepcion listed as his beneficiaries Aquilina Maloles, Roman M. Concepcion, Jr.,
Estela M. Concepcion, Rolando M. Concepcion and Robin M. Concepcion for the death benefit of
an association amounting to P2,505

Two sets of claimants presented themselves:

Juanita Golpeo, legal wife and her children, named beneficiaries by the deceased

Marcelino and Josefina Concepcion intervened in their own right aligning themselves Juanita
Golpeo and her minor children

Elsie Hicban, another common law wife and her child

RTC:Aquilina Maloles and her children the sole beneficiaries

Only the Juanita Golpeo and her minor children and the intervenors Marcelino and Josefina
Concepcion have appealed to this court

ISSUE: W/N Aquilina Molales common-law wife and her illegitimate children can claim the
benefits

HELD: YES.

Juanita Golpeo, by her silence and actions, had acquiesced in the illicit relations between her
husband and appellee Aquilina Maloles
new Civil Code recognized certain successional rights of illegitimate children

Separate Opinions:

REYES, J.B.L., J., concurring

I concur in the result for the reason that the contract here involved was perfected before the
new Civil Code took effect, and hence its provisions cannot be made to apply retroactively

Nario v. Philamlife Insurance Company - Loan Application and Surrender of Policy

20 SCRA 434

Facts:

> Mrs. Nario applied for and was issued a life Insurance policy (no. 503617) by PHILAMLIFE
under a 20-yr endowment plant, with a face value of 5T. Her husband Delfin and their
unemancipated son Ernesto were her revocable beneficiaries.

> Mrs. Nario then applied for a loan on the above policy with PHILAMLIFE w/c she is entitled to
as policy holder, after the policy has been in force for 3 years. The purpose of such loan was for
the school expenses of Ernesto.

> The application bore the written signature and consent of Delfin in 2 capacities

o As one of the irrevocable beneficiaries of the policy

o As father-guardian of Ernesto and also the legal administrator of the minors properties
pursuant to Art. 320 of the CC.

> PHILAMLIFE denied the loan application contending that written consent of the minor son
must not only be given by his father as legal guardian but it must also be authorized by the court
in a competent guardianship proceeding.

> Mrs. Nario then signified her decision to surrender her policy and demand its cash value which
then amounted to P 520.

> PHILAMLIFE also denied the surrender of the policy on the same ground as that given in
disapproving the loan application.

> Mrs. Nario sued PHILAMLIFE praying that the latter grant their loan application and/or accept
the surrender of said policy in exchange for its cash value.

> PHILAMLIFE contends that the loan application and the surrender of the policy involved acts
of disposition and alienation of the property rights of the minor, said acts are not within the
power of administrator granted under Art. 320 in relation to art. 326 CC, hence court authority is
required.

Issue:

Whether or not PHILAMLIFE was justified in refusing to grant the loan application and the
surrender of the policy.

Held:

YES.
SC agreed with the trial court that the vested interest or right of the beneficiaries in the policy
should be measured on its full face value and not on its cash surrender value, for in case of death
of the insured, said beneficiaries are paid on the basis of its face value and in case the insured
should discontinue paying premiums, the beneficiaries may continue paying it and are entitled to
automatic extended term or paid-up insurance options and that said vested right under the
policy cannot be divisible at any given time.

SC also agreed with TC that the said acts (loan app and surrender) constitute acts of disposition
or alienation of property rights and not merely management or administration because they
involve the incurring or termination of contractual obligations.

Under the laws (CC and rules of Court) The father is constituted as the minors legal
administrator of the propty, and when the propty of the child is worth more than P2T (as in the
case at bar, the minors propty was worth 2,500 his share as beneficiary), the father a must file
a petition for guardianship and post a guardianship bond. In the case at bar, the father did not
file any petition for guardianship nor post a guardianship bond, and as such cannot possibly
exercise the powers vested on him as legal administrator of the minors property. The consent
give for and in behalf of the son without prior court authorization to the loan application and the
surrender was insufficient and ineffective and PHILAMLIFE was justified in disapproving the said
applications.

Assuming that the propty of the ward was less than 2T, the effect would be the same, since the
parents would only be exempted from filing a bond and judicial authorization, but their acts as
legal administrators are only limited to acts of management or administration and not to acts of
encumbrance or disposition.

DELFIN NARIO vs. PHILIPPINE AMERICAN LIFE INSURANCE COMPANY

July 2, 2014 Leave a comment

G.R. No. L-22796, June 26, 1967, EN BANC (REYES J.B.L., J.)

FACTS:

Mrs. Alejandra Santos-Mario was, upon application, issued, on June 12, 1959, by the Philippine
American Life Insurance Co., a life insurance policy under a 20-year endowment plan, with a face
value of P5,000.00. She designated thereon her husband, Delfin Nario, and their unemancipated
minor son, Ernesto Nario, as her irrevocable beneficiaries. About the middle of June, 1963, She
then applied for a loan on the above policy with PHILAMLIFE w/c she is entitled to as policy
holder, after the policy has been in force for 3 years. The purpose of such loan was for the school
expenses of Ernesto.The application bore the written signature and consent of Delfin Nario in
two capacities first, as one of the irrevocable beneficiaries of the policy; and the other, as the
father-guardian of said minor son and irrevocable beneficiary, Ernesto Nario, and as the legal
administrator of the minors properties, pursuant to Article 320 of the Civil Code of the
Philippines. PHILAMLIFE denied the loan application contending that written consent of the
minor son must not only be given by his father as legal guardian but it must also be authorized
by the court in a competent guardianship proceeding. Mrs. Nario then signified her decision to
surrender her policy and demand its cash value which then amounted to P 520. The Insurance
Company also denied the surrender of the policy on the same ground as that given in
disapproving the loan application. Mrs. Nario sued PHILAMLIFE praying that the latter grant their
loan application and/or accept the surrender of said policy in exchange for its cash value. On
September 10, 1963, Mrs. Nario and her husband, Delfin, sued PHILAMLIFE praying that the
latter grant their loan application and/or accept the surrender of said policy in exchange for its
cash value. Defendant PHILAMLIFE contends that the loan application and the surrender of the
policy involved acts of disposition and alienation of the property rights of the minor, said acts are
not within the power of administrator granted under Art. 320 in relation to art. 326 CC, hence,
mere written consent given by the father-guardian, for and in behalf of the minor son, without
any court authority therefor, was not a sufficient compliance of the law. The lower court ruled
agreeing with defendants contention, sustained defendants affirmative defense, and rendered,
on January 28, 1964, its decision dismissing plaintiffs complaint. Unable to secure
reconsideration of the trial Courts ruling, petitioner appealed directly to this Court, contending
that the minors interest amounted to only one-half of the policys cash surrender value of
P520.00; that under Rule 96, Section 2 of the Revised Rules of Court, payment of the wards
debts is within the powers of the guardian, where no realty is involved; hence, there is no reason
why the father may not validly agree to the proposed transaction on behalf of the minor without
need of court authority.
ISSUE:

Whether or not PHILAMLIFE was justified in refusing to grant the loan application and the
surrender of the policy.

HELD:

YES. The decision appealed from is affirmed. Costs against appellants Nario. The appeal is
unmeritorious.

SC agreed with the lower court that the vested interest or right of the beneficiaries in the policy
should be measured on its full face value and not on its cash surrender value, for in case of death
of the insured, said beneficiaries are paid on the basis of its face value and in case the insured
should discontinue paying premiums, the beneficiaries may continue paying it and are entitled to
automatic extended term or paid-up insurance options, etc. and that said vested right under the
policy cannot be divisible at any given time. SC likewise agreed with the conclusion of the lower
court that the proposed transactions in question constitute acts of disposition or alienation of
property rights and not merely of management or administration because they involve the
incurring or termination of contractual obligations. The full face value of the policy is P5,000.00
and the minors vested interest therein, as one of the two (2) irrevocable beneficiaries, consists
of one-half () of said amount or P2,500.00. Applying laws (CC and rules of Court),the father a
must file a petition for guardianship and post a guardianship bond.

In the case at bar, the father did not file any petition for guardianship nor post a guardianship
bond, and as such cannot possibly exercise the powers vested on him as legal administrator of
the minors property. The consent gives for and in behalf of the son without prior court
authorization to the loan application and the surrender was insufficient and ineffective and
PHILAMLIFE was justified in disapproving the said applications. Assuming that the property of
the ward was less than P2,000, the effect would be the same, since the parents would only be
exempted from filing a bond and judicial authorization, but their acts as legal administrators are
only limited to acts of management or administration and not to acts of encumbrance or
disposition
G.R. No. L-22796 June 26, 1967

Lessons Applicable: Irrevocable Designation (Insurance)

FACTS:

June 12, 1959: Philippine American Life Insurance Co. issued a life insurance to Mrs. Alejandra
Santos-Mario a life insurance policy under a 20-year endowment plan, with a face value of
P5,000 designating her husband Delfin Nario and their unemancipation son Ernesto Nario, as her
irrevocable beneficiaries

June, 1963: She submitted her loan application to the life insurance co. with signature of her
husband in two capacities:

irrevocable beneficiaries

father-guardian of minor irrevocable beneficiary Ernesto

Insurance Co. denied asking that the legal guardian must be authorized by the court in a
competent guardianship proceeding

Upon denial, she opted to surrender her insurance policy in exchange of its cash surrender value
of P520 but it was also denied on the same ground

September 10, 1963: Mrs. Alejandra Santos-Nario and her husband, Delfin Nario, brought suit
against the Philippine American Life Insurance Co

RTC: favored the insurance company

CA: vested interest or right of the beneficiaries in the policy should be measured on its full face
value and not on its cash surrender value, for in case of death of the insured, said beneficiaries
are paid on the basis of its face value and in case the insured should discontinue paying
premiums, the beneficiaries may continue paying it and are entitled to automatic extended term
or paid-up insurance options, etc. and that said vested right under the policy cannot be divisible
at any given time. policy loan and surrender of policy constitute acts of disposition or alienation
of property rights and not merely of management or administration because they involve the
incurring or termination of contractual obligations

ISSUE: W/N parents as guardians can enter into transactions for the benefit of minor irrevocable
beneficiaries.
HELD: NO. Affirmed.

SEC. 7. Parents as guardians. When the property of the child under parental authority is worth
two thousand pesos or less, the father or the mother, without the necessity of court
appointment, shall be his legal guardian. When the property of the child is worth more than two
thousand pesos, the father or the mother shall be considered guardian of the child's property,
with the duties and obligations of guardians under these rules, and shall file the petition
required by Section 2 hereof. For good reasons the court may, however, appoint another suitable
person.

even if worth less than P2,000 parent's authority over the estate of the ward as a legal-guardian
would not extend to acts of encumbrance or disposition, as distinguished from acts of
management or administration

G.R. No. L-2227 August 31, 1948

Lessons Applicable: Insured Outlives Policy (Insurance)

Laws Applicable:

FACTS:

West Coast Life Insurance Company issued 2 policies of insurance on the life of Esperanza J.
Villanueva:

2,000 php - maturing on April 1, 1943

if living, on the 1st day of April 1943 - to insured

upon death during the continuance of this policy - to the beneficiary Bartolome Villanueva,
father of the insured, with right on the part of the insured to change the beneficiary

1940: Bartolome Villanueva died, Mariano J. Villanueva duly substituted as beneficiary, a brother
of the insured

3,000 php - maturing on March 31, 1943

Esperanza J. Villanueva survived the insurance period, for she died only on October 15, 1944,
without, however, collecting the insurance proceeds.

CFI: estate of the insured Esperanza is entitled to the insurance proceeds

ISSUE: W/N the estate of insured Esperanza should be entitled to the insurance proceeds since
she outlived the insurance policy
HELD: YES. appealed order is, therefore, hereby affirmed

To sustain the beneficiary's claim would be altogether eliminate from the policies the condition
that the insurer "agrees to pay . . . to the insured hereunder, if living

Upon the insured's death, within the period, the beneficiary will take, as against the personal
representative or the assignee of the insured. Upon the other hand, if the insured survives the
endowment period, the benefits are payable to him or to his assignee, notwithstanding a
beneficiary is designated in the policy

Issue:

Whether or not the beneficiary is entitled to the proceeds.

Held:

NO.

Under the policies, the insurer obligated itself to pay the insurance proceeds to: (1) the insured if
the latter lived on the dates of maturity; or (2) the beneficiary if the insured died during the
continuance of the policies. The first contingency excludes the second, and vice versa. In other
words, as the insured Esperanza was living on April 1 and March 31, 1943, the proceeds are
payable exclusively to her or to her estate unless she had before her death otherwise assigned
the matured policies.

The beneficiary could be entitled to said proceeds only in default of the first contingency. To
sustain the beneficiarys claim would be to altogether eliminate from the policies the condition
that the insurer agrees to pay to the insured if living.
This conclusion tallies with American Authorities who say that: The interest of the insured in the
proceeds of the insurance depends upon his survival of the expiration of the endowment period.
Upon the insureds death, within the period, the beneficiary will take, as against the personal
representatives the endowment period, the benefits are payable to him or to his assignee,
notwithstanding a beneficiary is designated in the policy. (AmJur and Couch Cyclopedia of
Insurance Law)

Philam v Arnaldo G.R. No. 76452 July 26, 1994

J. Quiason

Facts:

One Ramon Paterno complained about the unfair practices committed by the company against
its agents, employees and consumers. The Commissioner called for a hearing where Paterno was
required to specify which acts were illegal. Paterno then specified that the fees and charges
stated in the Contract of Agency between Philam and its agents be declared void. Philam, on the
other hand, averred that there Paterno must submit a verified formal complaint and that his
letter didnt contain information Philam was seeking from him. Philam then questioned the
Insurance Commissions jurisdiction over the matter and submitted a motion to quash. The
commissioner denied this. Hence this petition.

Issue: Whether or not the resolution of the legality of the Contract of Agency falls within the
jurisdiction of the Insurance Commissioner.

Held: No. Petition granted.

Ratio:

According to the Insurance code, the Insurance Commissioner was authorized to suspend,
directors, officers, and agents of insurance companies. In general, he was tasked to regulate the
insurance business, which includes:

(2) The term "doing an insurance business" or "transacting an insurance business," within
the meaning of this Code, shall include
(a) making or proposing to make, as insurer, any insurance contract;

(b) making, or proposing to make, as surety, any contract of suretyship as a vocation and not as
merely incidental to any other legitimate business or activity of the surety; (c) doing any kind of
business, including a reinsurance business, specifically recognized as constituting the doing of an
insurance business within the meaning of this Code; (d) doing or proposing to do any business in
substance equivalent to any of the foregoing in a manner designed to evade the provisions of
this Code. (Insurance Code, Sec. 2[2])

The contract of agency between Philamlife and its agents wasnt included with the
Commissoners power to regulate the business. Hence, the Insurance commissioner wasnt
vested with jurisidiction under the rule expresio unius est exclusion alterius.

The respondent contended that the commissioner had the quasi-judicial power to adjudicate
under Section 416 of the Code. It stated:

The Commissioner shall have the power to adjudicate claims and complaints involving any loss,
damage or liability for which an insurer may be answerable under any kind of policy or contract
of insurance, or for which such insurer may be liable under a contract of suretyship, or for which
a reinsurer may be used under any contract or reinsurance it may have entered into, or for which
a mutual benefit association may be held liable under the membership certificates it has issued
to its members, where the amount of any such loss, damage or liability, excluding interest, costs
and attorney's fees, being claimed or sued upon any kind of insurance, bond, reinsurance
contract, or membership certificate does not exceed in any single claim one hundred thousand
pesos.

This was, however, regarding complaints filed by the insured against the Insurance company.

Also, the insurance code only discusses the licensing requirements for agents and brokers. The
Insurance Code does not have provisions governing the relations between insurance companies
and their agents.

Investment Planning Corporation of the Philippines v. Social Security Commission- that an

insurance company may have two classes of agents who sell its insurance policies: (1) salaried
employees who keep definite hours and work under the control and supervision of the company;
and (2) registered representatives, who work on commission basis.

The agents under the 2nd sentence are governed by the Civil Code laws on agency. This means
that the regular courts have jurisdiction over this category.

Facts:

The late Petronilo Davac, a former employee of Lianga Bay, became a member of the SSS. He
designated Candelaria Davac as his beneficiary and indicated his relationship to her as that of
"wife". He died then each of the respondents (Candelaria Davac and Lourdes Tuplano) filed their
claims for death benefit with the SSS. The deceased contracted two marriages, the first, with
claimant Lourdes Tuplano and the second with Candelaria Davac. The processing was withheld.
The SSS filed this petition praying that the two parties be required to litigate their claims.

The SSS issued the resolution naming Davac as the valid beneficiary. Not satisfied with the
resolution, Lourdes Tuplano brought the appeal.

Issue: Whether or not the Social Security Commission acted correctly in declaring respondent
Candelaria Davac as the person entitled to receive the death benefits in question.

Held: Yes. SSS resolution affirmed.

Ratio:

Section 13, Republic Act No. 1161, provides:

1. SEC. 13. Upon the covered employee's death or total and permanent disability under such
conditions as the Commission may define, his beneficiaries, shall be entitled to the following
benefit

The beneficiary "as recorded" by the employee's employer is the one entitled to the death
benefits.

The appellant contends that the designation made in the person of the second and bigamous
wife is null and void, because (1) it contravenes the provisions of the Civil Code, and (2) it
deprives the lawful wife of her share in the conjugal property as well as of her own and her
child's legitime in the inheritance.

As to the first point, appellant argues that a beneficiary under the Social Security System
partakes of the nature of a beneficiary in life insurance policy and, therefore, the same
qualifications and disqualifications should be applied. Article 739 and 2012 of the civil code
prohibits persons whoi cannot receive donations from being beneficiaries of a policy.

The provisions mentioned in Article 739 are not applicable to Candelaria Davac because she was
not guilty of concubinage, there being no proof that she had knowledge of the previous
marriage of her husband Petronilo.

Regarding the second point raised by appellant, the benefits accruing from membership in the
Social Security System do not form part of the properties of the conjugal partnership of the
covered member. They are disbursed from a public special fund created by Congress in
pursuance to the declared policy of the Republic "to develop, establish gradually and perfect a
social security system which ... shall provide protection against the hazards of disability, sickness,
old age and death."

The sources of this special fund are from salary contributions.

Under other provisions, if there is a named beneficiary and the designation is not invalid, it is not
the heirs of the employee who are entitled to receive the benefits (unless they are the
designated beneficiaries themselves). It is only when there is no designated beneficiaries or
when the designation is void, that the laws of succession are applicable. The Social Security Act
is not a law of succession.