1.

INSURABLE INTEREST
 Lalican vs Insular Life 597 SCRA 159 – definition

> Eulogio insured

> Violita(wife/petitioner) – beneficiary

> Eulogio applied for life insurance policy with 2 riders amounting to 1.5M. Part of the stipulation is that if
insured is in default after the lapse of 30 days from the premium payment date, policy would be voided.
On January 1998, insured failed to pay the premium even after the lapse of 31 days grace period.
Defendant then considered the policy lapsed and void.

> Insured applied for reinstatement on September 17, 1998 and gave the unpaid premium plus interest to
the defendant’s agent. However, the insured died the same day. The agent without knowing the fact of the
insured’s death forwarded the application and payment to the defendant on September 18 which the
same was not granted since they were informed of the insured’ death.

> Violita, went to the defendant to claim the proceeds of the her husbands insurance. The latter denied
the claim and told the petitioner that Eulogio’s policy was not reinstated, though he already paid the
unpaid premium plus interest to the former’s agent, the same forwarded to them after the death of the
latter and as provided acceptance of such must be made on while the applicant is in good health. Instead,
defendant issued the petitioner a check as a full refund of what Eulogio paid.

> Petitioner file a money claim before RTC, alleging that the policy is ambiguous and must be resolved in
favor of the insured. RTC denied the claim stating that there is ni ambiguity in the policy. MR was filed but
the same was denied. Petitioner filed a reply to the decision of the MR instead of notice on appeal.
Reglementary period to file notice on appeal lapsed hence RTC declared the decision made in dismissing
the case attained its finality.

> therefore petitioner filed review on certiorari directly in SC.

Issue: w/n Eulogio was able to reinstate the lapsed insurance policy on his life before his death on 17
September 1998.

 Definition. An insurable interest is one of the most basic and essential requirements in an
insurance contract. In general, an insurable interest is that interest which a person is deemed to
have in the subject matter insured, where he has a relation or connection with or concern in it,
such that the person will derive pecuniary benefit or advantage from the preservation of the
subject matter insured and will suffer pecuniary loss or damage from its destruction, termination,
or injury by the happening of the event insured against.35 The existence of an insurable interest
gives a person the legal right to insure the subject matter of the policy of insurance.36 Section 10
of the Insurance Code indeed provides that every person has an insurable interest in his own
life.37 Section 19 of the same code also states that an interest in the life or health of a person
insured must exist when the insurance takes effect, but need not exist thereafter or when the loss
occurs.
 Before proceeding, the Court must correct the erroneous declaration of the RTC in its 30 August
2007 Decision that Policy No. 9011992 lapsed because of Eulogio’s non-payment of the
premiums which became due on 24 April 1998 and 24 July 1998. Policy No. 9011992 had lapsed
and become void earlier, on 24 February 1998, upon the expiration of the 31-day grace period for
 payment of the premium, which fell due on 24 January 1998, without any payment having been
made.
 One of the conditions for reinstating the policy is I/We agree that said Policy shall not be
considered reinstated until this application is approved by the Company during my/our lifetime
and good health and until all other Company requirements for the reinstatement of said Policy are
fully satisfied.


      Insular Life vs Ebrado 80 SCRA 181

Facts:

This is a novel question in insurance law: Can a common-law wife named as beneficiary in the life
insurance policy of a legally married man claim the proceeds thereof in case of death of the latter?

Buenaventura Ebrado- Insured

Capriona Ebrado- Common law wife, named as beneficiary

Pascuala Ebrado- Legal wife

Mr Ebrado died. Who can claim proceeds from his ins?

Issue: w/n interest in an insurance contract purports to that of the insured or the beneficiary.

Ruling:

It pertains to the interest of the insured to the exclusion of the debtor.

section 50 of the Insurance Act which provides that" (t)he insurance shall be applied
exclusively to the proper interest of the person in whose name it is made" 1 cannot be
validly seized upon to hold that the same includes the beneficiary. The word interest"
highly suggests that the provision refers only to the insured" and not to the beneficiary,
since a contract of insurance is personal in character. 2 Otherwise, the prohibitory laws
against illicit relationships especially on property and descent will be rendered
nugatory, as the same could easily be circumvented by modes of insurance. Rather, the
general rules of civil law should be applied to resolve this void in the Insurance Law
Article 2011 of the New Civil Code states: "The contract of insurance is governed by
special laws. Matters not expressly provided for in such special laws shall be regulated
by this Code." When not otherwise specifically provided for by the Insurance Law, the
contract of life insurance is governed by the general rules of the civil law regulating
contracts. 3 And under Article 2012 of the same Code, "any person who is forbidden
from receiving any donation under Article 739 cannot be named beneficiary of a life
insurance policy by the person who cannot make a donation to him." 4 Common-law
spouses are, definitely, barred from receiving donations from each other.

      El Oriente vs Posadas 54 PHIL 147

When must interest in life exist? Sec 181
Beneficiary Sec 11
      Insular Life vs Ebrado
      Vda  de Consuegra vs GSIS 37 SCRA 316
      Gercio vs Sun Life Insurance 48 Phil 53
      Nario vs PhilAm Life 20 SCRA 434
      Phil-Am Life vs Pineda 175 SCRA 416

Forfeiture of interest of beneficiary Sec 12

Insurable Interest in Property Insurance Sec 13, 14
     Gaisano Cagayan vs Ins. Co of North America 490 SCRA 286
     Commercial Union Assurance vs Lepanto 113 SCRA 752
     Harding vs Commercial Union Assurance 38 Phil 464
     Lampano vs Jose 30 Phil 537

Insurable Interest of carrier/depositary Sec 15

     Lopez vs Del Rosario 44 Phil 98

Contingent of expectant interest not an insurable interest Sec 16

Measure of insurable interest Sec 17
     Ong Lim Sing vs FEB Leasing 524 SCRA 333
     Philam Health Systems vs CA 379 SCRA 356

Effect when no insurable interest exist Sec 18

     Spouses CHA vs CA 277 SCRA 690
     Garcia vs Hong Kong Fire GR 20341

When insurable interest must exist Sec 19

    Taitong ChuaChe vs Insurance Commission 158 SCRA 366

Change in interest in property Sec 20, 21, 22, 23, 24

    San Miguel v Law Union Rock 40 Phil 674

Prohibited Stipulation in policy Sec 25

CONCEALMENT:
1. Argente vs West Coast Life Insurance 9 March 1928
2. Great Pacific Life vs CA ; Mondragon vs CA 89 SCRA 543 1979
3. Saturnino va PhilAmLife 7 SCRA 316 1963
4. Canilang cs CA 223 SCRA 443 1993
5. Sun Life Assurance vs CA and Sps Bacani 245 SCRA 268 1995
6. Edilon vs Manila Bankers Life Assurance 117 SCRA 187

REPRESENTATION:

7. Ng Gan Zee vs Asian Crusader Life 122 scra 461

8. Tan vs CA and Philam Life 174 SCRA 403 1989

THE POLICY
 
9. Pacific Banking vs CA 168 SCRA 1 1988
10. Oriental Assurance vs CA 200 SCRA 549
11. Fortune Assurance vs CA 244 SCRA 308

12. Bonifacio vs Mora 20 scra 261

13. Heirs of Maramag vs Maramag 588 scra 774 2009
14. Coquia vs Fieldmen's Insurance 26 SCRA 178 1968
15. Lopez v Del Rosario 44 Phil 98 (1922)
16. Development Bank vs IAC 143 SCRA 62
17. Teal Motor vs Orient Insurance 59 Phil 809
18. Ang vs Fulton Fire 2 scra 945
19. Sun Insurance office vs CA 195 scra 193 (1991)
20. Travellers insurance vs CA 272 SCRA 536 (1997)
21. Lopez vs Compania de Seguros 16 SCRA 855 (1966)
22. ACCFA vs Alpha Insurance 25 SCRA 151
23. Saura Impt vs Phil Intl Surety 8 scra 143 (1963)
24. Malayan Insurance vs Cruz-Arnaldo 154 SCRA 672 (1987)