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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 and convinced him to apply for additional insurance to avail of a promotional discount if the premium were paid annually. Primitivo, after filling the application form, through his wife, paid Lalog, and the latter indicated 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 for additional insurance of Perez, together with its supporting papers, to the office in Gumaca, 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 of his death, the application was still in Gumaca. Without knowing that Perez died, BF Lifeman Insurance approved the application and issued the corresponding policy. Petitioner Virginia Perez went to Manila to claim the benefits under the insurance policies. 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 of Primitivo and refunded the amount which his wife paid. BF Lifeman filed a complaint against Perez seeking the rescission and declaration of nullity of the insurance contract. ISSUE: 1. Whether or not the insurance contract was perfected 2. Whether or not the condition imposed that the policy must have been delivered to and accepted is null and void HELD: 1. Insurance is a contract whereby for a stipulated consideration, one party undertakes to compensate for the loss on a specified subject by specific perils. When Primitvo filed the application for insurance, and paid partially the premium, and submitted the results of his medical examination, his application was subject to the acceptance 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 a corresponding policy to the applicant. It is only when the applicant pays the premium and receives and accepts the policy while he is in good health that the contract is deemed 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 by applicant) 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 the insurance company. Rather, it is a suspensive one whereby the acquisition of rights depends upon the happening of an event which constitutes the condition. A contract of insurance, like other contracts, must be assented to by both parties either in person or by their agents. So long as an application for insurance has not been 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 completed contract, 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 of insurance 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., INC G.R. No. L-23276 November 29, 1968 FACTS: On December 1, 1961, Fieldmens Insurance Company issued in favor of Manila Yellow Taxicab a common carrier accident insurance policy covering the period of December 1, 1961 to December 1, 1962. While the policy was in force, or on February 10, 1962, a taxicab of the Insured, driven by Carlito Coquia, met a vehicular accident 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 an offer to pay P2,000.00, by way of compromise. The Insured rejected the same and made a counter-offer for P4,000.00, but the Company did not accept it. Hence, on September 18, 1962, the Insured and Carlito's parents, namely, Melecio Coquia and Maria Espanueva hereinafter referred to as the Coquias filed a complaint against the Company to collect the proceeds of the aforementioned policy. In its answer, the Company admitted the existence thereof, but pleaded lack of cause of action on the part of the plaintiffs. RTC ruled in favor of Coquias. CA ruled in favor of Coquias again. 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 action based thereon, this rule is subject to exceptions, one of which is found in the second paragraph of Article 1311 of the Civil Code of the Philippines, reading: "If a contract should contain some stipulation in favor of a third person, he may demand its fulfillment provided he communicated his acceptance to the obligor before its revocation. A mere incidental benefit or interest of a person is not sufficient. The contracting parties must have clearly and deliberately conferred a favor upon a third person." This is but the restatement of a well-known principle concerning contracts pour autrui, the enforcement of which may be demanded by a third party for whose benefit it was made, although not a party to the contract, before the stipulation in his favor 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 paid fifty percent (50%) of the corresponding premiums, which were deducted from his

weekly commissions. Under these conditions, it is clear that the Coquias who, admittedly, are the sole heirs of the deceased have a direct cause of action against the 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 did properly join the latter in filing the complaint herein.