DEL VAL vs. DEL VAL GR. NO.

9374, February 16, 1915 Petitioner: Francisco Del Val Respondents: Andres Del Val Ponente: Moreland, J

FACTS: Plaintiffs and defendants are brothers and sisters. They are the only heirs at law and next of kin of Gregorio Nacianceno Del Val, who died in Manila intestate. During the lifetime of the deceased he took out insurance on his life and made it payable to the defendant as sole beneficiary. After his death, Andres Del Val collected the face of the policy. Of said policy, he paid the sum of P18,365.20 to redeem certain real estate which the deceased had sold to third persons with a right of repurchase. The redemption was made by Andres lawyer in the name of Andres and the petitioners. According to Andres, said redemption made in his name and that of the petitioners was without his knowledge and that since the redemption, petitioners have been in possession of the property. Petitioners now contend that the amount of the insurance policy belonged to the estate of the deceased and not to Andres personally. ISSUE: Whether or not the proceeds of the insurance belonged to the estate of the Gregorio HELD: No. The contract of life insurance is a special contract and special laws that deal exclusively with that subject thereof determine the destination of the proceeds. The Civil Code has no provisions, which relate directly and specifically to life insurance contracts or to the destination of life insurance proceeds. That subject is regulated exclusively by the Code of Commerce, which provides for the terms of the contract, the relation of the parties and the destination of the proceeds of the policy. The proceeds of the life insurance policy being the exclusive property of the defendant and he having used a portion thereof in the repurchase of the real estate and such repurchase having been made and the conveyance taken in the names of all the heirs instead of the defendant alone, plaintiffs claim that the property belongs to the heirs in common. The SC held that if it is established by evidence that that was his intention and that the real estate was delivered to the plaintiffs with that understanding, then it is probable that their contention is

correct and that they are entitled to share equally with the defendant. HOWEVER, it appears from the evidence that the conveyances were taken in the name of the plaintiffs without the knowledge and consent of Andres, or that it was not his intention to make a gift to them of real estate, when it belongs to him. SOUTH SEA SURETY & INSURANCE CORP., INC. vs. COURT OF APPEALS GR. NO. 102253, June 2 1995 Petitioner: South Sea Surety and Insurance Company, Inc. Respondent: Hon. Court of Appeals and Valenzuela Hardwood and Industrial Supply, inc. Ponente: Vitug, J. FACTS: It appears that on 16 January 1984, plaintiff Valenzuela Hardwood and Industrial Supply, Inc. entered into an agreement with the defendant Seven Brothers whereby the latter undertook to load on board its vessel M/V Seven Ambassador the former's lauan round logs numbering 940 at the port of Maconacon, Isabela for shipment to Manila. On 20 January 1984, plaintiff insured the logs, against loss and/or, damage with defendant South Sea Surety and Insurance Co., Inc. for P2,000,000.00 end the latter issued its Marine Cargo Insurance Policy No. 84/24229 for P2,000,000.00 on said date. On 24 January 1984, the plaintiff gave the check in payment of the premium on the insurance policy to Mr. Victorio Chua. In the meantime, the said vessel M/V Seven Ambassador sank on 25 January 1984 resulting in the loss of the plaintiffs insured logs. On 30 January 1984, a check for P5,625.00 to cover payment of the premium and documentary stamps due on the policy was tendered to the insurer but was not accepted. Instead, the South Sea Surety and Insurance Co., Inc. cancelled the insurance policy it issued as of the date of inception for non-payment of the premium. On 2 February 1984, plaintiff demanded from defendant South Sea Surety and Insurance Co., Inc. the payment of the proceeds of the policy but the latter denied liability under the policy. Plaintiff likewise filed a formal claim with defendant Seven Brothers Shipping Corporation for the value of the lost logs but the latter denied the claim

South Sea contends that Mr. Chua is not authorized. The Regional Trial Court ruled in favor of Valenzuela Hardwood while the Court of Appeals absolved Seven Brothers because of a stipulation in the charter party that the ship owner would be exempted from liability in case of loss. ISSUES: Whether or not the nonpayment of the premium was sufficient to cancel the policy HELD: Yes. This is in accordance with Section 77 of the Insurance Code Sec. 77. An insurer is entitled to payment of the premium as soon as the thing insured is exposed to the peril insured against. Notwithstanding any agreement to the contrary, no policy or contract of insurance issued by an insurance company is valid and binding unless and until the premium thereof has been paid, except in the case of a life or an industrial life policy whenever the grace period provision applies. Undoubtedly, the payment of the premium is a condition precedent to, and essential for, the efficaciousness of the contract. The only two statutorily provided exceptions are (a) In case the insurance coverage relates to life or industrial life insurance when a grace period applies and (b) When the insurer makes a written acknowledgment of the receipt of premium, this acknowledgment being declared by law to be then conclusive evidence of the premium payment.