2 Insular vs Ebrado

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G.R. No. L-44059 October 28, 1977

THE INSULAR LIFE ASSURANE O!"AN#, LT$., %&'()t(*-'%%e&&ee,

+.

AR"ONIA T. ERA$O ') "ASUALA /$A. $E ERA$O, ee)')t-

'%%e&&')t.

!ARTIN, .

This is a novel question in insurance law: Can a common-law wife named as

beneciary in the life insurance policy of a legally married man claim the

proceeds thereof in case of death of the latter?

On September ! "#$! %uenaventura Cristor &brado was issued by The 'ife

(ssurance Co)! 'td)! *olicy +o) ,,""" on a whole-life for *.!$$),, with a!

rider for (ccidental /eath for the same amount %uenaventura C) &brado

designated T) &brado as the revocable beneciary in his policy) 0e to her as

his wife)

On October ! "#"! %uenaventura C) &brado died as a result of an t whenhe was hit by a failing branch of a tree) (s the policy was in force! The 1nsular

'ife (ssurance Co)! 'td) liable to pay the coverage in the total amount of

*!23.)24! representing the face value of the policy in the amount of

*.!$$),, plus the additional benets for accidental death also in the

amount of *.!$$),, and the refund of *$),, paid for the premium due

+ovember! "#"! minus the unpaid premiums and interest thereon due for

5anuary and 6ebruary! "#"! in the sum of *4#)2)

Carponia T) &brado led with the insurer a claim for the proceeds of the

*olicy as the designated beneciary therein! although she admits that she

and the insured %uenaventura C) &brado were merely living as husband and

wife without the benet of marriage)



*ascuala 7da) de &brado also led her claim as the widow of the deceased

insured) She asserts that she is the one entitled to the insurance proceeds!

not the common-law wife! Carponia T) &brado)

1n doubt as to whom the insurance proceeds shall be paid! the insurer! The

1nsular 'ife (ssurance Co)! 'td) commenced an action for 1nterpleader before

the Court of 6irst 1nstance of 8i9al on (pril "! "2,)

(fter the issues have been oined! a pre-trial conference was held on 5uly $!

"2! after which! a pre-trial order was entered reading as follows: ;<=)

>wph@

/uring the pre-trial conference! the parties manifested to the court) that

there is no possibility of amicable settlement) 0ence! the Court proceeded to

have the parties submit their evidence for the purpose of the pre-trial and

maAe admissions for the purpose of pretrial) /uring this conference! parties

Carponia T) &brado and *ascuala &brado agreed and stipulated: B that the

deceased %uenaventura &brado was married to *ascuala &brado with whom

she has si D ElegitimateB namelyF 0ernando! Cresencio! &lsa! &rlinda!

6eli9ardo and 0elen! all surnamed &bradoF B that during the lifetime of the

deceased! he was insured with 1nsular 'ife (ssurance Co) Gnder *olicy +o),,""" whole life plan! dated September ! "#$ for the sum of *.!$$),,

with the rider for accidental death benet as evidenced by &hibits ( for

plaintiHs and &hibit for the defendant *ascuala and &hibit 2 for Carponia

&bradoF 4B that during the lifetime of %uenaventura &brado! he was living

with his common-wife! Carponia &brado! with whom she had children

although he was not legally separated from his legal wifeF 3B that

%uenaventura in accident on October ! "#" as evidenced by the death

&hibit 4 and aIdavit of the police report of his death &hibit .F .B that

complainant Carponia &brado led claim with the 1nsular 'ife (ssurance Co)which was contested by *ascuala &brado who also led claim for the

proceeds of said policy #B that in view ofthe adverse claims the insurance

company led this action against the two herein claimants Carponia and

*ascuala &bradoF 2B that there is now due from the 1nsular 'ife (ssurance Co)

as proceeds of the policy *!23.)24F $B that the beneciary designated by

the insured in the policy is Carponia &brado and the insured made



reservation to change the beneciary but although the insured made the

option to change the beneciary! same was never changed up to the time of

his death and the wife did not have any opportunity to write the company

that there was reservation to change the designation of the parties agreed

that a decision be rendered based on and stipulation of facts as to who

among the two claimants is entitled to the policy)

Gpon motion of the parties! they are given ten E,B days to le their

simultaneous memoranda from the receipt of this order)

SO O8/&8&/)

On September .! "2! the trial court rendered udgment declaring among

others! Carponia T) &brado disqualied from becoming beneciary of the

insured %uenaventura Cristor &brado and directing the payment of the

insurance proceeds to the estate of the deceased insured) The trial court

held: ;<=)>wph@

1t is patent from the last paragraph of (rt) 24" of the Civil Code that a

criminal conviction for adultery or concubinage is not essential in order to

establish the disqualication mentioned therein) +either is it also necessary

that a nding of such guilt or commission of those acts be made in a

separate independent action brought for the purpose) The guilt of the donee

EbeneciaryB may be proved by preponderance of evidence in the same

proceeding Ethe action brought to declare the nullity of the donationB)

1t is! however! essential that such adultery or concubinage eists at the time

defendant Carponia T) &brado was made beneciary in the policy in questionfor the disqualication and incapacity to eist and that it is only necessary

that such fact be established by preponderance of evidence in the trial) Since

it is agreed in their stipulation above-quoted that the deceased insured and

defendant Carponia T) &brado were living together as husband and wife

without being legally married and that the marriage of the insured with the

other defendant *ascuala 7da) de &brado was valid and still eisting at the



time the insurance in question was purchased there is no question that

defendant Carponia T) &brado is disqualied from becoming the beneciary

of the policy in question and as such she is not entitled to the proceeds of

the insurance upon the death of the insured)

6rom this udgment! Carponia T) &brado appealed to the Court of (ppeals!

but on 5uly ! "2#! the (ppellate Court certied the case to Gs as involving

only questions of law)

Je aIrm the udgment of the lower court)

) 1t is quite unfortunate that the 1nsurance (ct E8( 42! as amendedB or

even the new 1nsurance Code E*/ +o) #! as amendedB does not contain

any specic provision grossly resolutory of the prime question at hand)

Section ., of the 1nsurance (ct which provides that KEtBhe insurance shag be

applied eclusively to the proper interest of the person in whose name it is

madeK cannot be validly sei9ed upon to hold that the mm includes the

beneciary) The word KinterestK highly suggests that the provision refers only

to the KinsuredK and not to the beneciary! since a contract of insurance is

personal in character) 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) 8ather!

the general rules of civil law should be applied to resolve this void in the

1nsurance 'aw) (rticle , of the +ew Civil Code states: KThe contract of

insurance is governed by special laws) Latters not epressly provided for in

such special laws shall be regulated by this Code)K Jhen not otherwise

specically provided for by the 1nsurance 'aw! the contract of life insurance

is governed by the general rules of the civil law regulating contracts) 4 (nd

under (rticle , of the same Code! Kany person who is forbidden from

receiving any donation under (rticle 24" cannot be named beneciary of afe insurance policy by the person who cannot maAe a donation to him) 3

Common-law spouses are! denitely! barred from receiving donations from

each other) (rticle 24" of the new Civil Code provides: ;<=)>wph@

The following donations shall be void:



) Those made between persons who were guilty of adultery or

concubinage at the time of donationF

Those made between persons found guilty of the same criminal oHense! in

consideration thereofF

4) Those made to a public oIcer or his wife! descendants or ascendants

by reason of his oIce)

1n the case referred to in +o) ! the action for declaration of nullity may bebrought by the spouse of the donor or doneeF and the guilt of the donee may

be proved by preponderance of evidence in the same action)

) 1n essence! a life insurance policy is no diHerent from a civil donation

insofar as the beneciary is concerned) %oth are founded upon the same

consideration: liberality) ( beneciary is liAe a donee! because from the

premiums of the policy which the insured pays out of liberality! the

beneciary will receive the proceeds or prots of said insurance) (s aconsequence! the proscription in (rticle 24" of the new Civil Code should

equally operate in life insurance contracts) The mandate of (rticle ,

cannot be laid aside: any person who cannot receive a donation cannot be

named as beneciary in the life insurance policy of the person who cannot

maAe the donation) . Gnder (merican law! a policy of life insurance is

considered as a testament and in construing it! the courts will! so far as

possible treat it as a will and determine the eHect of a clause designating the

beneciary by rules under which wins are interpreted) #

4) *olicy considerations and dictates of morality rightly ustify the

institution of a barrier between common law spouses in record to *roperty

relations since such hip ultimately encroaches upon the nuptial and lial

rights of the legitimate family There is every reason to hold that the bar in

donations between legitimate spouses and those between illegitimate ones



should be enforced in life insurance policies since the same are based on

similar consideration (s above pointed out! a beneciary in a fe insurance

policy is no diHerent from a donee) %oth are recipients of pure benecence)

So long as manage remains the threshold of family laws! reason and morality

dictate that the impediments imposed upon married couple should liAewise

be imposed upon etra-marital relationship) 1f legitimate relationship is

circumscribed by these legal disabilities! with more reason should an illicit

relationship be restricted by these disabilities) Thus! in Latabuena v)

Cervantes! 2 this Court! through 5ustice 6ernando! said: ;<=)>wph@

1f the policy of the law is! in the language of the opinion of the then 5ustice

5)%)') 8eyes of that court ECourt of (ppealsB! Mto prohibit donations in favor of

the other consort and his descendants because of and undue and improper

pressure and inNuence upon the donor! a preudice deeply rooted in ourancient lawFK por-que no se enganen desponandose el uno al otro por amor

que han de consunoM E(ccording toB the *artidas E*art 17! Tit) 1! '(J 17B!

reiterating the rationale M+o Lutuato amore invicem spoliarenturM the

*andects E%A! 3! Titl) ! /e donat! inter virum et uoremBF then there is very

reason to apply the same prohibitive policy to persons living together as

husband and wife without the benet of nuptials) 6or it is not to be doubted

that assent to such irregular connection for thirty years bespeaAs greater

inNuence of one party over the other! so that the danger that the law seeAs

to avoid is correspondingly increased) Loreover! as already pointed out byGlpian Ein his lib) 4 ad Sabinum! fr) B! Mit would not be ust that such

donations should subsist! lest the condition #f those who incurred guilt

should turn out to be better)M So long as marriage remains the cornerstone of

our family law! reason and morality aliAe demand that the disabilities

attached to marriage should liAewise attach to concubinage)

1t is hardly necessary to add that even in the absence of the above

pronouncement! any other conclusion cannot stand the test of scrutiny) 1t

would be to indict the frame of the Civil Code for a failure to apply a laudable

rule to a situation which in its essentials cannot be distinguished) Loreover!

if it is at all to be diHerentiated the policy of the law which embodies a

deeply rooted notion of what is ust and what is right would be nullied if

such irregular relationship instead of being visited with disabilities would be

attended with benets) Certainly a legal norm should not be susceptible to



such a reproach) 1f there is every any occasion where the principle of

statutory construction that what is within the spirit of the law is as much a

part of it as what is written! this is it) Otherwise the basic purpose discernible

in such codal provision would not be attained) Jhatever omission may be

apparent in an interpretation purely literal of the language used must be

remedied by an adherence to its avowed obective)

3) Je do not thinA that a conviction for adultery or concubinage is

eacted before the disabilities mentioned in (rticle 24" may eHectuate) Lore

specically! with record to the disability on Kpersons who were guilty of

adultery or concubinage at the time of the donation!K (rticle 24" itself

provides: ;<=)>wph@

1n the case referred to in +o) ! the action for declaration of nullity may be

brought by the spouse of the donor or doneeF and the guilty of the donee

may be proved by preponderance of evidence in the same action)

The underscored clause neatly conveys that no criminal conviction for the

oHense is a condition precedent) 1n fact! it cannot even be from the

aforequoted provision that a prosecution is needed) On the contrary! the law

plainly states that the guilt of the party may be proved Kin the same actingfor declaration of nullity of donation) (nd! it would be suIcient if evidence

preponderates upon the guilt of the consort for the oHense indicated) The

quantum of proof in criminal cases is not demanded)

1n the caw before Gs! the requisite proof of common-law relationship

between the insured and the beneciary has been conveniently supplied by

the stipulations between the parties in the pre-trial conference of the case) 1t

case agreed upon and stipulated therein that the deceased insured%uenaventura C) &brado was married to *ascuala &brado with whom she has

si legitimate childrenF that during his lifetime! the deceased insured was

living with his common-law wife! Carponia &brado! with whom he has two

children) These stipulations are nothing less than udicial admissions which!

as a consequence! no longer require proof and cannot be contradicted) $ (

fortiori! on the basis of these admissions! a udgment may be validly



rendered without going through the rigors of a trial for the sole purpose of

proving the illicit liaison between the insured and the beneciary) 1n fact! in

that pretrial! the parties even agreed Kthat a decision be rendered based on

this agreement and stipulation of facts as to who among the two claimants is

entitled to the policy)K

(CCO8/1+P'Q! the appealed udgment of the lower court is hereby aIrmed)

Carponia T) &brado is hereby declared disqualied to be the beneciary of

the late %uenaventura C) &brado in his life insurance policy) (s a

consequence! the proceeds of the policy are hereby held payable to the

estate of the deceased insured) Costs against Carponia T) &brado)

SO O8/&8&/)

2 Insular vs Ebrado

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