ENRIQUEZ VS.

SUN LIFE INSURANCE OF CANADA

G.R. No. L-15895; November 29, 1920

FACTS:

 This is an action made by the adminstrator of the estate of Joaquin Herrer of P6,000.00 paid by the
deceased for a life annuity on the ground that the contract for a life annuity had not been perfected.
 Joaquin Herrer made an application with Sun Life for a life annuity. He paid the amount of P6,000.00 to
the Manila manager who gave him a "provisional" receipt "subject to medical examination and approval
of the Company's Central Office." The application was forwarded to the head office in Canada and the
policy was issued on December 4, 1917 in Canada. Meanwhile, on December 18, 1917, Herrer's attorney
wrote to the Manila Office stating that Herrer wanted to withdraw his application to which the office wrote
a letter dated November 26, 1917 stating that the policy had already been issued. The letter was received
by the attorney on December 21, 1917. Herrer had died a day earlier on December 20, 1920.
 he trial court ruled that the contract had been perfected, hence this appeal.

ISSUES:

1. Whether or not the policyholder had received notice of the acceptance of his policy;

2. Whether or not the contract of life annuity was perfected.

HELD:

1. NO. The facts clearly show that Herrer was not informed of the acceptance of the policy before his death.

2. NO. The contract was not perfected. Art. 1262 provides that acceptance by letter does not bind the person
making the offer except from the time it came to his knowledge. The pertinent fact is that according to the
provisional receipt, the insurance company had to: 1) conduct a medical examination; 2) had to obtain the head
office's approval; and 3) somehow communicate such approval. It is true that the letter notifying acceptance was
deposited in the post office, but the fact of notification is a rebuttable presumption and the facts clearly show that
Herrer never received the notice of the acceptance before his death.
 Great Pacific Life Insurance Corp. v. Court of Appeals

G.R.No. 113899, 13 October 1999, 316 SCRA 677 (2)

FACTS:
 Ngo Hing filed an application with the (Grepalife) for a 20 year endowment policy in the amount of
P50,000.00 on the life of his one-year old daughter Helen Go. Said respondent supplied the essential
data which petitioner Mondragon, Branch Manager of the Grepalife wrote on the form in his own
handwriting. The latter paid the annual premuim to the Company, but he retained a certain amount as
his commission for being a duly authorized agent of Grepalife.
 Upon the payment of the insurance premium, the binding deposit receipt was issued to private
respondent Ngo Hing. Likewise, petitioner Mondragon handwrote at the bottom of the back page of the
application form his strong recommendation for the approval of the insurance application. Then
Mondragon received a letter from Grepalife disapproving the insurance application because said life
insurance application for 20-year endowment plan is not available for minors below seven years old, but
Grepalife can consider the same under the Juvenile Triple Action Plan, and advised that if the offer is
acceptable, the Juvenile Non-Medical Declaration be sent to the company.
 The non-acceptance of the insurance plan by Grepalife was allegedly not communicated by Mondragon
to Ngo Hing. Instead, Mondragon wrote back Grepalife again strongly recommending the approval of the
20-year endowment insurance plan to children. It was when things were in such state that on May 28,
1957 Helen Go died of influenza. Thereupon, Ngo Hing sought the payment of the proceeds of the
insurance, but having failed in his effort, he filed the action for the recovery of the same before the CFI
of Cebu, which rendered the adverse decision.

ISSUES:
 W/N the binding deposit receipt constituted a temporary contract of the life insurance?
 W/N private respondent Ngo Hing concealed the state of health and physical condition of Helen Go,
which rendered the policy void?

RULING:
 No. As held in Lim vs. Sun, a binding deposit receipt is conditional and does not insure outright. The
receipt is merely an acknowledgment that the latter's branch office had received from the applicant the
insurance premium and had accepted the application subject for processing by the insurance company.
There was still approval or rejection the same on the basis of whether or not the applicant is "insurable
on standard rates."

Since Pacific Life disapproved the insurance application of respondent Ngo Hing, the binding
deposit receipt in question had never become in force at any time.

 Yes. Ngo Hing had deliberately concealed the state of health of his daughter Helen Go. “The contract of
insurance is one of perfect good faith uberrima fides meaning good faith, absolute and perfect candor or
openness and honesty; the absence of any concealment or demotion, however slight.”

The concealment entitles the insurer to rescind the contract of insurance. When he supplied data,
he was fully aware that his one-year old daughter is typically a mongoloid child. He withheld the fact
material to the risk insured.
Spouses NILO CHA and STELLA UY CHA, and UNITED INSURANCE CO., INC., petitioners, vs. COURT
OF APPEALS and CKS DEVELOPMENT CORPORATION, respondents.
[G.R. No. 124520. August 18, 1997 PADILLA, J.:] (3)

FACTS:
 Spouses Cha are the lessees in the lease agreement with CKS Development Corp (CSK) in a 1 year
contract which states that “ 18. LESSEE shall not insure against fire the chattels, merchandise, textiles,
goods and effects placed at any stall or store or space in the leased premises without first obtaining
the written consent and approval of the LESSOR. If the LESSEE obtain(s) the insurance thereof
without the consent of the LESSOR then the policy is deemed assigned and transferred to the
LESSOR for its own benefit”.
 Notwithstanding the said stipulation, Sps Cha insured against loss by fire their merchandise inside the
leased premises with the United Insurance Co. (United) without the consent of CKS. On the day that the
lease contract was to expire, fire broke out inside the leased premises. CKS wrote the United a demand
letter asking that the proceeds of the insurance contract between the Cha spouses and United be paid
directly to CKS based on its lease contract with Cha spouses.

ISSUE: W/N PARAGRAPH 18 IS VALID GIVING CKS THE RIGHT TO THE INSURANCE PROCEEDS OF THE
INSURANCE CONTRACT BETWEEN THE CHA SPOUSES AND UNITED.

RULING:

 NO. The law on contracts provided that the stipulations contained in a contract cannot be contrary to law,
morals, good customs, public order or public policy. Sec. 18 of the Insurance Code provides that no
contract or policy of insurance on property shall be enforceable except for the benefit of some person
having an insurable interest in the property insured. Insurable interest in the property insured must exist
at the time the insurance takes effect and at the time the loss occurs. The basis of such requirement of
insurable interest in property insured is based on sound public policy: to prevent a person from taking out
an insurance policy on property upon which he has no insurable interest and collecting the proceeds of
said policy in case of loss of the property. In such a case, the contract of insurance is a mere wager which
is void under Section 25 of the Insurance Code.
 In the present case, it cannot be denied that CKS has no insurable interest in the goods and merchandise
inside the leased premises under the provisions of Section 17 of the Insurance Code which provide the
measure of an insurable interest in property is the extent to which the insured might be damnified by loss
of injury thereof.United cannot be compelled to pay the proceeds of the fire insurance policy to CKS who
has no insurable interest in the property insured. CKS cannot be validly a beneficiary of the fire insurance
policy taken by the petitioner-spouses over their merchandise. This insurable interest over said
merchandise remains with the insured, the Cha spouses. Thus, the automatic assignment of the policy
to CKS under the provision of the lease contract previously quoted is void for being contrary to law and/or
public policy.
 GEAGONIA VS CA
G.R. No. 114427, February 6, 1995 (4)

FACTS:
 Geagonia, owner of Norman's Mart located in the public market of San Francisco, Agusan del Sur, obtained
from the Country Bankers Insurance Corp. fire insurance policy No. F-14622 for P100,000.00. The policy
covered his stocks-in-trade for the period from December 1989 to December 1990. He also declared therein
Mercantile Insurance Co. Inc. as co-insurer for P50,000.00. On May 27, 1990, a fire of accidental origin
broke out at the San Francisco public market and completely destroyed Geagonia’s insured stocks-in-trade,
prompting him to claim under the said fire insurance policy. Country Bankers denied the claim because it
found out that at the time of the loss, Geagonia’s stocks-in-trade were likewise covered by fire insurance
policies No. GA-28146 and No. GA-28144, for P100,000.00 each, issued by the Cebu Branch of the
Philippines First Insurance Co., Inc. (PFIC), therefore violating Condition 3 of the subject policy (F-14622).
The petitioner then filed a complaint against Country Bankers with the Insurance Commission for recovery
of the insurance proceeds. He attached to the complaint his letter to the insurance company asking for the
reconsideration of the denial, wherein he admitted that he knew existence of the two previous insurance
policies issued by PFIC at the time he obtained the fire insurance policy with Country Bankers however he
was not aware of the condition requiring him to inform the insurance company regarding said prior policies.
The Insurance Commission decided in favor of Geagonia and found him unaware of the existence of the
two prior insurance policies from PFIC and ordered Country Bankers to pay the proceeds of the insurance
plus interest and attorney’s fees. Country Bankers appealed to the CA, which reversed the decision of the
Insurance Commission, relying on Geagonia’s letter to Country Bankers which contradicts his pretension
that he did not know of the other two policies. Hence, Geagonia raised the issue to the Supreme Court.

ISSUE: Whether or not petitioner Geagonia violated Condition 3 of the subject policy and whether he may
recover the insurance proceeds from Policy No. F-14622.

RULING:
 No, Geagonia did not violate Condition 3 and thus may recover the insurance proceeds of Policy No. F-
14622. Provisions, conditions or exceptions in policies which tend to work a forfeiture of insurance policies
should be construed most strictly against those for whose benefits they are inserted, and most favorably
toward those against whom they are intended to operate. Thus, the Court held that Condition 3 of the
subject policy is not totally free from ambiguity and must be meticulously analyzed. The condition is a valid
provision in fire insurance policies which intends to prevent the increase in the moral hazard. For its violation
to avoid the policy, the other insurance must be upon the same subject matter, the same interest therein,
and the same risk.
 The Court came up with two conclusions. First, the prohibition applies only to double insurance and (2) the
nullity of the policy shall only be to the extent exceeding P200,000.00 of the total policies obtained. As to
the first conclusion, a double insurance exists where the same person is insured by several insurers
separately in respect of the same subject and interest. The insurable interests of a mortgagor and a
mortgagee on the mortgaged property are distinct and separate. The mortgagor's insurable interest covers
the full value of the mortgaged property, even though the mortgage debt is not equivalent to the full value
of the property, whereas the mortgagee's insurable interest is to the extent of the debt, since the property
is relied upon as security thereof, and in insuring, he is not insuring the property but his interest or lien
thereon. Since the two policies of the PFIC do not cover the same interest as that covered by the policy of
the private respondent, no double insurance exists. The non-disclosure then of the former policies was not
fatal to the petitioner's right to recover on the private respondent's policy.
 Second, the inapplicability of Condition 3 when the total insurance in force at the time of loss does not
exceed P200,000 implies that the private respondent was amenable to assume a co-insurer's liability up to
a loss not exceeding P200,000.00. This was to discourage over-insurance and thus avert the perpetration
of fraud. When a property owner obtains insurance policies from two or more insurers in a total amount that
exceeds the property's value, the insured may have an inducement to destroy the property for the purpose
of collecting the insurance. The public as well as the insurer is interested in preventing a situation in which
a fire would be profitable to the insured.
 The Court reinstated the decision of the Insurance Commission which awarded the claim of petitioner
Geagonia against Country Bankers Insurance Corporation.
 RCBC v. CA - Insurance Proceeds
289 SCRA 292 (1998) (5)

FACTS:
 GOYU applied for credit facilities and accommodations with RCBC. After due evaluation, a credit facility
in the amount of P30 million was initially granted. Upon GOYU's application increased GOYU's credit
facility to P50 million, then to P90 million, and finally to P117 million
 As security for its credit facilities with RCBC, GOYU executed two REM and two CM in favor of RCBC,
which were registered with the Registry of Deeds at. Under each of these four mortgage contracts, GOYU
committed itself to insure the mortgaged property with an insurance company approved by RCBC, and
subsequently, to endorse and deliver the insurance policies to RCBC.
 GOYU obtained in its name a total of 10 insurance policies from MICO. In February 1992, Alchester
Insurance Agency, Inc., the insurance agent where GOYU obtained the Malayan insurance policies,
issued nine endorsements in favor of RCBC seemingly upon instructions of GOYU
 On April 27, 1992, one of GOYU's factory buildings in Valenzuela was gutted by fire. Consequently,
GOYU submitted its claim for indemnity.
 MICO denied the claim on the ground that the insurance policies were either attached pursuant to writs
of attachments/garnishments issued by various courts or that the insurance proceeds were also claimed
by other creditors of GOYU alleging better rights to the proceeds than the insured.
 GOYU filed a complaint for specific performance and damages. RCBC, one of GOYU's creditors, also
filed with MICO its formal claim over the proceeds of the insurance policies, but said claims were also
denied for the same reasons that AGCO denied GOYU's claims.
 However, because the endorsements do not bear the signature of any officer of GOYU, the trial court, as
well as the Court of Appeals, concluded that the endorsements are defective and held that RCBC has no
right over the insurance proceeds.

ISSUE:
 Whether or not RCBC has a right over the insurance proceeds.
HELD:

 Affirmative. It is settled that a mortgagor and a mortgagee have separate and distinct insurable interests
in the same mortgaged property, such that each one of them may insure the same property for his own
sole benefit. There is no question that GOYU could insure the mortgaged property for its own exclusive
benefit. In the present case, although it appears that GOYU obtained the subject insurance policies
naming itself as the sole payee, the intentions of the parties as shown by their contemporaneous acts,
must be given due consideration in order to better serve the interest of justice and equity.
 It is to be noted that 9 endorsement documents were prepared by Alchester in favor of RCBC. The Court
is in a quandary how Alchester could arrive at the idea of endorsing any specific insurance policy in favor
of any particular beneficiary or payee other than the insured had not such named payee or beneficiary
been specifically disclosed by the insured itself. It is also significant that GOYU voluntarily and purposely
took the insurance policies from MICO, a sister company of RCBC, and not just from any other insurance
company. Alchester would not have found out that the subject pieces of property were mortgaged to
RCBC had not such information been voluntarily disclosed by GOYU itself. Had it not been for GOYU,
Alchester would not have known of GOYU's intention of obtaining insurance coverage in compliance with
its undertaking in the mortgage contracts with RCBC, and verify, Alchester would not have endorsed the
policies to RCBC had it not been so directed by GOYU.
 On equitable principles, particularly on the ground of estoppel, the Court is constrained to rule in favor of
mortgagor RCBC. RCBC, in good faith, relied upon the endorsement documents sent to it as this was
only pursuant to the stipulation in the mortgage contracts. We find such reliance to be justified under the
circumstances of the case. GOYU failed to seasonably repudiate the authority of the person or persons
who prepared such endorsements. Over and above this, GOYU continued, in the meantime, to enjoy the
benefits of the credit facilities extended to it by RCBC. After the occurrence of the loss insured against, it
was too late for GOYU to disown the endorsements for any imagined or contrived lack of authority of
Alchester to prepare and issue said endorsements. If there had not been actually an implied ratification
of said endorsements by virtue of GOYU's inaction in this case, GOYU is at the very least estopped from
assailing their operative effects.
 To permit GOYU to capitalize on its non-confirmation of these endorsements while it continued to enjoy
the benefits of the credit facilities of RCBC which believed in good faith that there was due endorsement
pursuant to their mortgage contracts, is to countenance grave contravention of public policy, fair dealing,
good faith, and justice. Such an unjust situation, the Court cannot sanction. Under the peculiar
circumstances obtaining in this case, the Court is bound to recognize RCBC's right to the proceeds of
the insurance policies if not for the actual endorsement of the policies, at least on the basis of the
equitable principle of estoppel.
 GOYU cannot seek relief under Section 53 of the Insurance Code which provides that the proceeds of
insurance shall exclusively apply to the interest of the person in whose name or for whose benefit it is
made. The peculiarity of the circumstances obtaining in the instant case presents a justification to take
exception to the strict application of said provision, it having been sufficiently established that it was the
intention of the parties to designate RCBC as the party for whose benefit the insurance policies were
taken out. Consider thus the following:
o It is undisputed that the insured pieces of property were the subject of mortgage contracts entered
into between RCBC and GOYU in consideration of and for securing GOYU's credit facilities from
RCBC. The mortgage contracts contained common provisions whereby GOYU, as mortgagor,
undertook to have the mortgaged property properly covered against any loss by an insurance
company acceptable to RCBC.
o GOYU voluntarily procured insurance policies to cover the mortgaged property from MICO, no
less than a sister company of RCBC and definitely an acceptable insurance company to RCBC.
o Endorsement documents were prepared by MICO's underwriter, Alchester Insurance Agency,
Inc., and copies thereof were sent to GOYU, MICO and RCBC. GOYU did not assail, until of late,
the validity of said endorsements.
o GOYU continued until the occurrence of the fire, to enjoy the benefits of the credit facilities
extended by RCBC which was conditioned upon the endorsement of the insurance policies to be
taken by GOYU to cover the mortgaged properties.
 This Court cannot over stress the fact that upon receiving its copies of the endorsement documents
prepared by Alchester, GOYU, despite the absence written conformity thereto, obviously considered said
endorsement to be sufficient compliance with its obligation under the mortgage contracts since RCBC
accordingly continued to extend the benefits of its credit facilities and GOYU continued to benefit
therefrom. Just as plain too is the intention of the parties to constitute RCBC as the beneficiary of the
various insurance policies obtained by GOYU. The intention of the parties will have to be given full force
and effect in this particular case. The insurance proceeds may, therefore, be exclusively applied to RCBC,
which under the factual circumstances of the case, is truly the person or entity for whose benefit the
policies were clearly intended.
 G.R. No. 147839 June 8, 2006

GAISANO CAGAYAN, INC. Petitioner,

vs.
INSURANCE COMPANY OF NORTH AMERICA, Respondent. (6)

FACTS:

 Intercapitol Marketing Corporation (IMC) is the maker of Wrangler Blue Jeans. While Levi Strauss (Phils.)
Inc. (LSPI) is the local distributor of products bearing trademarks owned by Levi Strauss & Co. IMC and
LSPI separately obtained from respondent Insurance Company of North America (ICNA) fire insurance
policies for their book debt endorsements related to their ready-made clothing materials which have been
sold or delivered to various customers and dealers of the Insured anywhere in the Philippines which are
unpaid45 days after the time of the loss.

 Petitioner Gaisano Cagayan, Inc. is a customer and dealer of IMC and LSPI products. It owns the
Gaisano Superstore Complex which was consumed by fire in 1991. Included in the items destroyed in
the fire were stocks of ready-made clothing materials sold and delivered by IMC and LSPI.

 Respondent filed a complaint for damages against Gaisano Cagayan, Inc. alleging that IMC and LSPI
filed their claims under their respective fire insurance policies which it paid, thus it was subrogated to
their rights. Petitioner averred it not be held liable because the items were destroyed due to fortuitous
event or force majeure. The RTC ruled that IMC and LSPI retained ownership of the delivered goods
until fully paid, it must bear the loss (res perit domino). The CA ruled otherwise and ordered petitioner to
pay respondent Php 2,119,205.60 and Php 535,613.00 the amount paid by the latter to IMC and LSPI,
respectively.

ISSUE: WON RESPONDENT MAY CLAIM AGAINST PETITIONER FOR THE INSURED DEBT.

HELD:

 AFFIRMATIVE: The insurance policy is clear that the subject of the insurance is the book debts and not
goods sold and delivered to the customers and dealers of the insured. Under Art. 1504 of the Civil code,
unless otherwise agreed, the goods remain at the seller's risk until the ownership therein is transferred
to the buyer, but when the ownership therein is transferred to the buyer the goods are at the buyer's risk
whether actual delivery has been made or not; except where delivery of the goods has been made to
the buyer or to a bailee for the buyer, in pursuance of the contract and the ownership in the goods
has been retained by the seller merely to secure performance by the buyer of his obligations
under the contract, the goods are at the buyer's risk from the time of such delivery.

 IMC and LSPI did not lose complete interest over the goods. They have an insurable interest until full
payment of the value of the delivered goods. Unlike the civil law concept of res perit domino, where
ownership is the basis for consideration of who bears the risk of loss, in property insurance, one's interest
is not determined by concept of title, but whether insured has substantial economic interest in the
property. Anyone who derives a benefit from its existence or would suffer loss from its destruction has an
insurable interest in the said property.The rationale that an obligor should be held exempt from liability
when the loss occurs thru a fortuitous event only holds true when the obligation consists in the delivery
of a determinate thing and there is no stipulation holding him liable even in case of fortuitous event. It
does not apply when the obligation is pecuniary in nature.
 June 5, 2009

HEIRS OF LORETO C. MARAMAG, represented by surviving spouse VICENTA PANGILINAN

MARAMAG, Petitioners,
vs.
EVA VERNA DE GUZMAN MARAMAG, ODESSA DE GUZMAN MARAMAG, KARL BRIAN DE GUZMAN
MARAMAG, TRISHA ANGELIE MARAMAG, THE INSULAR LIFE ASSURANCE COMPANY, LTD., and
GREAT PACIFIC LIFE ASSURANCE CORPORATION, Respondents. (7)

FACTS:

 Petitioners in this case are the legitimate heirs of deceased Loreto. The petitioners were not named as
beneficiaries in the insurance policies issued by Insular and Grepalife. Petitioners claim that Eva, the
concubine of Loreto and a suspect in his murder, is disqualified from being designated of the insurance
policies. They further add that Eva’s children with Loreto, being illegitimate children, are entitled to a
lesser share of the proceeds of the policies. Thus, they prayed that the share of Eva and portions of the
share of Loreto’s illegitimate children should be awarded to them, being the legitimate heirs of Loreto
entitled to their respective legitimes.

ISSUE: WHETHER OR NOT ILLEGITIMATE CHILDREN CAN BE BENEFICIARIES IN AN

INSURANCE CONTRACT.

RULING:

 AFFIRMATIVE. Section 53 of the Insurance Code states that the insurance proceeds shall be applied
exclusively to the proper interest of the person in whose name or for whose benefit it is made unless
otherwise specified in the policy. Pursuant thereto, it is obvious that the only persons entitled to claim the
insurance proceeds are either the insured, if still alive; or the beneficiary, if the insured is already
deceased, upon the maturation of the policy. The exception to this rule is a situation where the insurance
contract was intended to benefit third persons who are not parties to the same in the form of favorable
stipulations or indemnity. In such a case, third parties may directly sue and claim from the insurer.
 Petitioners are third parties to the insurance contracts with Insular and Grepalife and, thus, are not entitled
to the proceeds thereof. Accordingly, respondents Insular and Grepalife have no legal obligation to turn
over the insurance proceeds to petitioners. The revocation of Eva as a beneficiary in one policy and her
disqualification as such in another are of no moment considering that the designation of the illegitimate
children as beneficiaries in Loreto’s insurance policies remains valid. Because no legal proscription exists
in naming as beneficiaries the children of illicit relationships by the insured, the shares of Eva in the
insurance proceeds, whether forfeited by the court in view of the prohibition on donations under Article
739 of the Civil Code or by the insurers themselves for reasons based on the insurance contracts, must
be awarded to the said illegitimate children, the designated beneficiaries, to the exclusion of petitioners.
It is only in cases where the insured has not designated any beneficiary, or when the designated
beneficiary is disqualified by law to receive the proceeds, that the insurance policy proceeds shall
redound to the benefit of the estate of the insured.
 G.R. No. 183526 August 25, 2009

VIOLETA R. LALICAN, Petitioner,

vs.
THE INSULAR LIFE ASSURANCE COMPANY LIMITED, AS REPRESENTED BY THE PRESIDENT
VICENTE R. AVILON, Respondent. (8)

FACTS:

 Eulogio Lalican applied for an insurance policy with the Insular Life amounting to Php 1,500,000. Under
the terms of the policy, Eulogio was to pay the premiums on a quarterly basis, having a grace period of
31 days, for the payment of each premium subsequent to the first. If any premium was not paid on or
before the due date, the policy would be in default and if the premium remained unpaid until the end of
the grace period, the policy would automatically lapse and become void.
 Eulogio paid the premiums due on the first two succeeding payment dates but failed to pay subsequent
premiums even after the lapse of the grace period thereby rendering the policy void. He submitted an
application for reinstatement of policy through Josephine Malaluan, an agent of Insular Life, together
with the payment of the unpaid premiums. However, the Insular Life notified him that his application
could not be processed because he failed to pay the overdue interest of the unpaid premiums.
 On Sept. 17, 1998, Eulogio submitted to Malaluan’s house a second application for reinstatement
including the payment for the overdue interest as well as for the premiums due for April and July of that
year, which was received by Malaluan’s husband on her behalf and was thereby issued a receipt for the
amount Eulogio deposited. However, on that same day, Eulogio died of cardio-respiratory arrest
secondary to electrocution.
 Violeta, Eulogio’s widow filed with the Insular Life a claim for payment of the full proceeds of the policy
but the latter informed her that the claim could not be granted since at the time of Eulogio’s death, his
policy has already lapsed and he failed to reinstate the same. Violeta requested a reconsideration of her
claim but the same was also rejected. Therefore, she filed a complaint for death claim benefits with the
RTC alleging the unfair claim settlement practice of Insular Life and its deliberate failure to act with
reasonable promptness on her insurance claim. The trial court rendered a decision in favor of Insular
Life and after the former denied her motion for reconsideration, she directly elevated her case to the
Supreme Court via the petition for review on Certiorari.

ISSUE: WHETHER OR NOT THE POLICY OF EULOGIO WAS REINSTATED BEFORE HIS DEATH.

RULING:

 To reinstate a policy means to restore the same to premium-paying status after it has been permitted to
lapse. Both the policy contract and application for reinstatement provide for specific conditions for the
reinstatement of a lapsed policy.
 According to the Application for Reinstatement, the policy would only be considered reinstated upon the
approval of the application by Insular Life during the applicant’s “lifetime and good health” and whatever
amount the application paid in connection was considered to be a deposit only until approval of said
application.
 Eulogio’s death rendered impossible full compliance with the conditions for reinstatement of policy even
though, before his death, he managed to file his application for reinstatement and deposit the amount for
payment of his overdue premiums and interest thereon with Malaluan. As expressly provided on the
policy contract, agents of Insular Life have no authority to approve any application for reinstatement.
They still had to turn over to Insular Life the application for reinstatement and accompanying deposit, for
processing and approval of the latter.
