Insurance Title I to V

7/18/2019 Insurance Title I to V

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Topic: Insurable interest in life of person upon whom one depends

for education or support or in whom he has a pecuniary interest

Case No. 21

El Oriente vs. osadas! "# hil. 147 G.R. No. 34774 September 21, 1931

FACTS:

El Oriente, in order to protect itself against the loss that it might suer by reason of

the death of its manager, whose death would be a serious loss to El Oriente

procured from the nsurer an insurance policy on the life of the said manager with El

Oriente as the designated sole bene!ciary" #pon death of its manager, El Oriente

recei$ed all the proceeds of the insurance" Collector of nternal %e$enue assessed

an income ta& on the insurance proceeds"

SS#E:

'hether or not the proceeds of insurance ta(en by a corporation on the life of an

important o)cial to indemnify it against loss in case of his death is ta&able"

*E+:

-o" #nder the ncome Ta& +aw, the proceeds of life insurance policies paid to

bene!ciaries are e&empt" n reality, what the plainti recei$ed was in the nature of

an indemnity for the loss which it actually suered because of the death of its

manager and not ta&able income"

Topic: $imitation in the appointment of bene%ciary

Case No. 22

The Insular Life ssuran!e "ompan#, Lt$. %s &bra$o '( S"R 1'1 )GR No. L*44(+9

!tober 2', 1977-

Facts:

Cristor Ebrado .Cristor/ procured life insurance with nsular +ife designating

Carponia Ebrado .Carponia/, his common0law wife as bene!ciary" #pon death of

Cristor, Carponia !led a claim on the insurance proceeds" 1ascuala Ebrado, claiming

to be the legal wife also !led a claim"

SS#E:



'hether a common0law wife named as a bene!ciary in the life insurance policy of a

legally married man entitled to claim the proceeds thereof in case of the death of

the latter"

%#+-2:

-o" The contract of insurance is go$ern by the pro$isions of the new ci$il code on

matters not speci!cally pro$ided for in the insurance code" #nder Article 3453 of

the -CC, 6any person who is forbidden from recei$ing any donation under article

789 cannot be named bene!ciary of a life insurance policy by the person who

cannot ma(e a donation to him" And #nder the Article 789, paragraph 5 speci!cally

states 6those made between persons who were guilty of adultery or concubinage at

the time of donation" Thus common0law spouses are barred from recei$ing

donations from each other" Also con$iction for adultery or concubinage is not

re;uired as only preponderance of e$idence is necessary" 6n essence, a life

insurance policy is no dierent from a ci$il donation insofar as the bene!ciary is

concerned" <oth are founded upon the same consideration: liberality"

&i'ht of insured to chan'e bene%ciary in life insurance

Case No. 2(

)I$*&IO +E&CIO vs. ,-N $IE *,,-&*NCE O C*N*/* 0 hil. "( +.&. No.

2(34(5 ,eptember 2! 162"7

FACTS:

Sun +ife Assurance Co" of Canada issued a 340year endowment insurance policy on

the life of *ilario 2ercio with a pro$ision of wife Andrea =ialcita as bene!ciary"

*owe$er years after, a di$orce was decreed between 2ercio and =ialcita" *ence

2ercio formally noti!ed the Sun +ife that he had re$o(ed his donation in fa$or of

Andrea =ialcita, and that he had designated in her stead his present wife, Adela

2arcia de 2ercio, as the bene!ciary of the policy but Sun +ife refused"

SS#E:

'>- 2ercio has the right to change the bene!ciary of the policy"

*E+:

-O" The wife has an insurable interest in the life of her husband" The bene!ciary has

an absolute $ested interest in the policy from the date of its issuance and deli$ery"

She has a subsisting interest in the policy" f the husband wishes to retain to himself

the control and ownership of the policy he may so pro$ide in the policy" <ut if the



policy contains no pro$ision authori?ing a change of bene!ciary without the

bene!ciary@s consent, the insured cannot ma(e such change"

&i'ht of insured to chan'e bene%ciary in life insurance

Case No. 20

+o vs. &edfern 32 hil 31 8+& 0334"! 2" *pril 16019

Facts:

%edfern obtained a life insurance policy designating Angela, his mother asbene!ciary" #pon death, Angela !led a claim but was refused on the ground that thepolicy was pre$iously amended by %edfern to include 2o as another bene!ciary"

ssue:

'hether the addition of 2os name as co0bene!ciary can be allowed for her share inthe insurance proceeds"

*eld:

-o" 'hen designated in a policy, the bene!ciary ac;uires a right of which he cannotbe depri$ed of without his consent, unless the right has been reser$ed speci!callyto the insured to modify the policy" The same doctrine was enunciated by the Courtin the cases of 2ercio $s" Sun +ife Assurance Co" of Canada .B 1hil" DD/ and nsular+ife $s" Su$a .8B O" 2a?" 5/" *erein, it is admitted that %edfern did not reser$ee&pressly his right to change or modify the policy" Thus, the addition of bene!ciaryis not allowed"



&epublic of the hilippines,-&EE CO-&T

anila

EN ;*NC

+.&. No. (0330 ,eptember 21! 16(1

E$ O&IENTE *;&IC* /E T*;*CO,! INC.! plainti<=appellant!vs.

>-*N O,*/*,! Collector of Internal &evenue! defendant=appellee.

+ibbs and c/onou'h and &oman O?aeta for appellant.*ttorney=+eneral >aranilla for appellee.

*$CO$! >.:

The issue in this case is whether the proceeds of insurance ta(en by a corporationon the life of an important o)cial to indemnify it against loss in case of his death,are ta&able as income under the 1hilippine ncome Ta& +aw"

The parties submitted the case to the Court of First nstance of anila for decisionupon the following agreed statement of facts:

5" That the plainti is a domestic corporation duly organi?ed and e&isting under andby $irtue of the laws of the 1hilippine slands, ha$ing its principal o)ce at -o" 783Calle E$angelista, anila, 1""G and that the defendant is the duly appointed,;uali!ed and acting Collector of nternal %e$enue of the 1hilippine slands"

3" That on arch 5, 593D, plainti, in order to protect itself against the loss that itmight suer by reason of the death of its manager, A" Helhagen, who had had morethan thirty0!$e .8D/ years of e&perience in the manufacture of cigars in the1hilippine slands, and whose death would be a serious loss to the plainti, procuredfrom the anufacturers +ife nsurance Co", of Toronto, Canada, thru its local agentE"E" Elser, an insurance policy on the life of the said A" Helhagen for the sum of

ID4,444, #nited States currency"

8" That the plainti, El Oriente, Fabrica de Tabacos, nc", designated itself as the solebene!ciary of said policy on the life of its said manager"

B" That during the time the life insurance policy hereinbefore referred to was inforce and eect plainti paid from its funds all the insurance premiums due thereon"



D" That the plainti charged as e&penses of its business all the said premiums anddeducted the same from its gross incomes as reported in its annual income ta&returns, which deductions were allowed by the defendant upon a showing made bythe plainti that such premiums were legitimate e&penses of its .plainti@s/business"

" That the said A" Helhagen, the insured, had no interest or participation in theproceeds of said life insurance policy"

7" That upon the death of said A" Helhagen in the year 5939, the plainti recei$ed allthe proceeds of the said life insurance policy, together with the interests and thedi$idends accruing thereon, aggregating 154B,9D7""

" That o$er the protest of the plainti, which claimed e&emption under section B of the ncome Ta& +aw, the defendant Collector of nternal %e$enue assessed andle$ied the sum of 18,5B"7B as income ta& on the proceeds of the insurance policymentioned in the preceding paragraph, which ta& the plainti paid under instantprotest on July 3, 5984G and that defendant o$erruled said protest on July 9, 5984"

Thereupon, a decision was handed down which absol$ed the defendant from thecomplaint, with costs against the plainti" From this Kudgment, the plainti appealed, and its counsel now allege that:

5" That trial court erred in holding that section B of the ncome Ta& +aw .Act -o"388/ is not applicable to the present case"

3" The trial court erred in reading into the law certain e&ceptions and distinctionsnot warranted by its clear and une;ui$ocal pro$isions"

8" The trial court erred in assuming that the proceeds of the life insurance policy in;uestion represented a net pro!t to the plainti when, as a matter of fact, it merelyrepresented an indemnity, for the loss suered by it thru the death of its manager,the insured"

B" The trial court erred in refusing to hold that the proceeds of the life insurancepolicy in ;uestion is not ta&able income, and in absol$ing the defendant from thecomplaint"

The ncome Ta& +aw for the 1hilippines is Act -o" 388, as amended" t is di$idedinto four chapters: Chapter On ndi$iduals, Chapter On Corporations, Chapter 2eneral Administrati$e 1ro$isions, and Chapter H 2eneral 1ro$isions" n chapter On ndi$iduals, is to be found section B which pro$ides that, LThe following incomesshall be e&empt from the pro$isions of this law: .a/ The proceeds of life insurancepolicies paid to bene!ciaries upon the death of the insured """ "L Section 54, asamended, in Chapter On Corporations, pro$ides that, There shall be le$ied,assessed, collected, and paid annually upon the total net income recei$ed in thepreceding calendar year from all sources by e$ery corporation """ a ta& of three percentum upon such income """ "L Section 55 in the same chapter, pro$ides thee&emptions under the law, but neither here nor in any other section is referencemade to the pro$isions of section B in Chapter "



#nder the $iew we ta(e of the case, it is su)cient for our purposes to directattention to the anomalous and $ague condition of the law" t is certain that theproceeds of life insurance policies are e&empt" t is not so certain that the proceedsof life insurance policies paid to corporate bene!ciaries upon the death of theinsured are li(ewise e&empt" <ut at least, it may be said that the law is inde!nite in

phraseology and does not permit us une;ui$ocally to hold that the proceeds of lifeinsurance policies recei$ed by corporations constitute income which is ta&able"

The situation will be better elucidated by a brief reference to laws on the samesubKect in the #nited States" The ncome Ta& +aw of 595 e&tended to the 1hilippine+egislature, when it came to enact Act -o" 388, to copy the American statute"Subse;uently, the Congress of the #nited States enacted its ncome Ta& +aw of 5959, in which certain doubtful subKects were clari!ed" Thus, as to the point beforeus, it was made clear, when not only in the part of the law concerning indi$idualswere e&emptions pro$ided for bene!ciaries, but also in the part concerningcorporations, speci!c reference was made to the e&emptions in fa$or of indi$iduals,thereby ma(ing the same applicable to corporations" This was authoritati$ely

pointed out and decided by the #nited States Supreme Court in the case of #nitedStates $s" Supplee0<iddle *ardware Co" . M593BN, 3D #"S", 59/, which in$ol$edfacts ;uite similar to those before us" 'e do not thin( the decision of the highercourt in this case is necessarily controlling on account of the di$ergences noted inthe federal statute and the local statute, but we !nd in the decision certainlanguage of a general nature which appears to furnish the clue to the correctdisposition of the instant appeal" Conceding, therefore, without necessarily ha$ingto decide, the assignments of error -os" 5 and 3 are not well ta(en, we would turnto the third assignment of error"

t will be recalled that El Oriente, Fabrica de Tabacos, nc", too( out the insurance onthe life of its manager, who had had more than thirty0!$e years@ e&perience in themanufacture of cigars in the 1hilippines, to protect itself against the loss it mightsuer by reason of the death of its manager" 'e do not belie$e that this factsigni!es that when the plainti recei$ed 154B,9D7" from the insurance on the lifeof its manager, it thereby reali?ed a net pro!t in this amount" t is true that thencome Ta& +aw, in e&empting indi$idual bene!ciaries, spea(s of the proceeds of lifeinsurance policies as income, but this is a $ery slight indication of legislati$eintention" n reality, what the plainti recei$ed was in the nature of an indemnity forthe loss which it actually suered because of the death of its manager"

To ;uote the e&act words in the cited case of Chief Justice Taft deli$ering the opinionof the court:

t is earnestly pressed upon us that proceeds of life insurance paid on the death of the insured are in fact capital, and cannot be ta&ed as income under the Si&teenthAmendment" Eisner $s" acomber, 3D3 #"S", 59, 347G erchants@ +oan Trust Co"$s" Smietan(a, 3DD #"S", D49, D5" 'e are not re;uired to meet this ;uestion" t isenough to sustain our construction of the act to say that proceeds of a life insurancepolicy paid on the death of the insured are not usually classed as income"



" " " +ife insurance in such a case is li(e that of !re and marine insurance, P acontract of indemnity" Central -at" <an( $s" *ume, 53 #"S", 59D" The bene!t to begained by death has no periodicity" t is a substitution of money $alue for somethingpermanently lost, either in a house, a ship, or a life" Assuming, without deciding,that Congress could call the proceeds of such indemnity income, and $alidly ta& itas such, we thin( that, in $iew of the popular conception of the life insurance as

resulting in a single addition of a total sum to the resources of the bene!ciary, andnot in a periodical return, such a purpose on its part should be e&press, as itcertainly is not here"

Considering, therefore, the purport of the stipulated facts, considering theuncertainty of 1hilippine law, and considering the lac( of e&press legislati$eintention to ta& the proceeds of life insurance policies paid to corporatebene!ciaries, particularly when in the e&emption in fa$or of indi$idual bene!ciariesin the chapter on this subKect, the clause is inserted Le&empt from the pro$isions of this law,L we deem it reasonable to hold the proceeds of the life insurance policy in;uestion as representing an indemnity and not ta&able income"

The foregoing pronouncement will result in the Kudgment being re$ersed and inanother Kudgment being rendered in fa$or of the plainti and against the defendantfor the sum of 18,5B"7B" So ordered, without costs in either instance"

A$anceQa, C"J", Street, Hillamor, Ostrand, %omualde?, Hilla0%eal, and mperial, JJ",concur"

&epublic of the hilippines,-&EE CO-&T

anila

I&,T /I@I,ION

+.&. No. $=004"6 October 2! 1633

T)E IN,-$*& $IE *,,-&*NCE CO*NA! $T/.! plainti<=appellee!vs.

C*&ONI* T. E;&*/O and *,C-*$* @/*. /E E;&*/O! defendants=appellants.

*&TIN! >.:

This is a no$el ;uestion in insurance law: Can a common0law wife named asbene!ciary in the life insurance policy of a legally married man claim the proceedsthereof in case of death of the latterR

On September 5, 59, <uena$entura Cristor Ebrado was issued by The +ifeAssurance Co", +td", 1olicy -o" 449939 on a whole0life for 1D,3"44 with a, rider for



Accidental eath for the same amount <uena$entura C" Ebrado designated T"Ebrado as the re$ocable bene!ciary in his policy" *e to her as his wife"

On October 35, 599, <uena$entura C" Ebrado died as a result of an t when he washit by a failing branch of a tree" As the policy was in force, The nsular +ifeAssurance Co", +td" liable to pay the co$erage in the total amount of 155,7BD"78,

representing the face $alue of the policy in the amount of 1D,3"44 plus theadditional bene!ts for accidental death also in the amount of 1D,3"44 and therefund of 15"44 paid for the premium due -o$ember, 599, minus the unpaidpremiums and interest thereon due for January and February, 599, in the sum of 18"37"

Carponia T" Ebrado !led with the insurer a claim for the proceeds of the 1olicy as thedesignated bene!ciary therein, although she admits that she and the insured<uena$entura C" Ebrado were merely li$ing as husband and wife without the bene!tof marriage"

1ascuala Hda" de Ebrado 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 common0law wife, Carponia T" Ebrado"

n doubt as to whom the insurance proceeds shall be paid, the insurer, The nsular+ife Assurance Co", +td" commenced an action for nterpleader before the Court of First nstance of %i?al on April 39, 5974"

After the issues ha$e been Koined, a pre0trial conference was held on July , 5973,after which, a pre0trial order was entered reading as follows: Q"UVwphW5

uring the pre0trial conference, the parties manifested to the court" that there is nopossibility of amicable settlement" *ence, the Court proceeded to ha$e the partiessubmit their e$idence for the purpose of the pre0trial and ma(e admissions for thepurpose of pretrial" uring this conference, parties Carponia T" Ebrado and 1ascualaEbrado agreed and stipulated: 5/ that the deceased <uena$entura Ebrado wasmarried to 1ascuala Ebrado with whom she has si& P .legitimate/ namelyG*ernando, Cresencio, Elsa, Erlinda, Feli?ardo and *elen, all surnamed EbradoG 3/that during the lifetime of the deceased, he was insured with nsular +ife AssuranceCo" #nder 1olicy -o" 449939 whole life plan, dated September 5, 59 for the sumof 1D,3"44 with the rider for accidental death bene!t as e$idenced by E&hibits Afor plaintis and E&hibit 5 for the defendant 1ascuala and E&hibit 7 for CarponiaEbradoG 8/ that during the lifetime of <uena$entura Ebrado, he was li$ing with hiscommon0wife, Carponia Ebrado, with whom she had 3 children although he was notlegally separated from his legal wifeG B/ that <uena$entura in accident on October35, 599 as e$idenced by the death E&hibit 8 and a)da$it of the police report of hisdeath E&hibit DG D/ that complainant Carponia Ebrado !led claim with the nsular+ife Assurance Co" which was contested by 1ascuala Ebrado who also !led claim forthe proceeds of said policy / that in $iew ofthe ad$erse claims the insurancecompany !led this action against the two herein claimants Carponia and 1ascualaEbradoG 7/ that there is now due from the nsular +ife Assurance Co" as proceeds of the policy 155,7BD"78G / that the bene!ciary designated by the insured in thepolicy is Carponia Ebrado and the insured made reser$ation to change the



bene!ciary but although the insured made the option to change the bene!ciary,same was ne$er changed up to the time of his death and the wife did not ha$e anyopportunity to write the company that there was reser$ation to change thedesignation of the parties agreed that a decision be rendered based on andstipulation of facts as to who among the two claimants is entitled to the policy"

#pon motion of the parties, they are gi$en ten .54/ days to !le their simultaneousmemoranda from the receipt of this order"

SO O%E%E"

On September 3D, 5973, the trial court rendered Kudgment declaring among others,Carponia T" Ebrado dis;uali!ed from becoming bene!ciary of the insured<uena$entura Cristor Ebrado and directing the payment of the insurance proceedsto the estate of the deceased insured" The trial court held: Q"UVwphW5

t is patent from the last paragraph of Art" 789 of the Ci$il Code that a criminalcon$iction for adultery or concubinage is not essential in order to establish the

dis;uali!cation mentioned therein" -either is it also necessary that a !nding of suchguilt or commission of those acts be made in a separate independent action broughtfor the purpose" The guilt of the donee .bene!ciary/ may be pro$ed bypreponderance of e$idence in the same proceeding .the action brought to declarethe nullity of the donation/"

t is, howe$er, essential that such adultery or concubinage e&ists at the timedefendant Carponia T" Ebrado was made bene!ciary in the policy in ;uestion for thedis;uali!cation and incapacity to e&ist and that it is only necessary that such fact beestablished by preponderance of e$idence in the trial" Since it is agreed in theirstipulation abo$e0;uoted that the deceased insured and defendant Carponia T"Ebrado were li$ing together as husband and wife without being legally married andthat the marriage of the insured with the other defendant 1ascuala Hda" de Ebradowas $alid and still e&isting at the time the insurance in ;uestion was purchasedthere is no ;uestion that defendant Carponia T" Ebrado is dis;uali!ed frombecoming the bene!ciary of the policy in ;uestion and as such she is not entitled tothe proceeds of the insurance upon the death of the insured"

From this Kudgment, Carponia T" Ebrado appealed to the Court of Appeals, but on July 55, 597, the Appellate Court certi!ed the case to #s as in$ol$ing only;uestions of law"

'e a)rm the Kudgment of the lower court"

5" t is ;uite unfortunate that the nsurance Act .%A 3837, as amended/ or e$en thenew nsurance Code .1 -o" 53, as amended/ does not contain any speci!cpro$ision grossly resolutory of the prime ;uestion at hand" Section D4 of thensurance Act which pro$ides that L.t/he insurance shag be applied e&clusi$ely tothe proper interest of the person in whose name it is madeL 5 cannot be $alidlysei?ed upon to hold that the mm includes the bene!ciary" The word LinterestL highlysuggests that the pro$ision refers only to the LinsuredL and not to the bene!ciary,since a contract of insurance is personal in character" 3 Otherwise, the prohibitory



laws against illicit relationships especially on property and descent will be renderednugatory, as the same could easily be circum$ented by modes of insurance" %ather,the general rules of ci$il law should be applied to resol$e this $oid in the nsurance+aw" Article 3455 of the -ew Ci$il Code states: LThe contract of insurance isgo$erned by special laws" atters not e&pressly pro$ided for in such special lawsshall be regulated by this Code"L 'hen not otherwise speci!cally pro$ided for by the

nsurance +aw, the contract of life insurance is go$erned by the general rules of theci$il law regulating contracts" 8 And under Article 3453 of the same Code, Lanyperson who is forbidden from recei$ing any donation under Article 789 cannot benamed bene!ciary of a !fe insurance policy by the person who cannot ma(e adonation to him" B Common0law spouses are, de!nitely, barred from recei$ingdonations from each other" Article 789 of the new Ci$il Code pro$ides: Q"UVwphW5

The following donations shall be $oid:

5" Those made between persons who were guilty of adultery or concubinage at thetime of donationG

Those made between persons found guilty of the same criminal oense, inconsideration thereofG

8" Those made to a public o)cer or his wife, descendants or ascendants by reasonof his o)ce"

n the case referred to in -o" 5, the action for declaration of nullity may be broughtby the spouse of the donor or doneeG and the guilt of the donee may be pro$ed bypreponderance of e$idence in the same action"

3" n essence, a life insurance policy is no dierent from a ci$il donation insofar asthe bene!ciary is concerned" <oth are founded upon the same consideration:liberality" A bene!ciary is li(e a donee, because from the premiums of the policywhich the insured pays out of liberality, the bene!ciary will recei$e the proceeds orpro!ts of said insurance" As a conse;uence, the proscription in Article 789 of thenew Ci$il Code should e;ually operate in life insurance contracts" The mandate of Article 3453 cannot be laid aside: any person who cannot recei$e a donation cannotbe named as bene!ciary in the life insurance policy of the person who cannot ma(ethe donation" D #nder American law, a policy of life insurance is considered as atestament and in construing it, the courts will, so far as possible treat it as a will anddetermine the eect of a clause designating the bene!ciary by rules under whichwins are interpreted"

8" 1olicy considerations and dictates of morality rightly Kustify the institution of abarrier between common law spouses in record to 1roperty relations since such hipultimately encroaches upon the nuptial and !lial rights of the legitimate family

There is e$ery reason to hold that the bar in donations between legitimate spousesand those between illegitimate ones should be enforced in life insurance policiessince the same are based on similar consideration As abo$e pointed out, abene!ciary in a !fe insurance policy is no dierent from a donee" <oth are recipientsof pure bene!cence" So long as manage remains the threshold of family laws,reason and morality dictate that the impediments imposed upon married couple



should li(ewise be imposed upon e&tra0marital relationship" f legitimate relationshipis circumscribed by these legal disabilities, with more reason should an illicitrelationship be restricted by these disabilities" Thus, in atabuena $" Cer$antes, 7this Court, through Justice Fernando, said: Q"UVwphW5

f the policy of the law is, in the language of the opinion of the then Justice J"<"+"

%eyes of that court .Court of Appeals/, @to prohibit donations in fa$or of the otherconsort and his descendants because of and undue and improper pressure andinXuence upon the donor, a preKudice deeply rooted in our ancient lawGL por0;ue nose enganen desponKandose el uno al otro por amor ;ue han de consuno@ .Accordingto/ the 1artidas .1art H, Tit" Y, +A' H/, reiterating the rationale @-o utuato amorein$icem spoliarentur@ the 1andects .<(, 3B, Titl" 5, e donat, inter $irum et u&orem/Gthen there is $ery reason to apply the same prohibiti$e policy to persons li$ingtogether as husband and wife without the bene!t of nuptials" For it is not to bedoubted that assent to such irregular connection for thirty years bespea(s greaterinXuence of one party o$er the other, so that the danger that the law see(s to a$oidis correspondingly increased" oreo$er, as already pointed out by #lpian .in his lib"83 ad Sabinum, fr" 5/, @it would not be Kust that such donations should subsist, lest

the condition f those who incurred guilt should turn out to be better"@ So long asmarriage remains the cornerstone of our family law, reason and morality ali(edemand that the disabilities attached to marriage should li(ewise attach toconcubinage"

t is hardly necessary to add that e$en in the absence of the abo$e pronouncement,any other conclusion cannot stand the test of scrutiny" t would be to indict theframe of the Ci$il Code for a failure to apply a laudable rule to a situation which inits essentials cannot be distinguished" oreo$er, if it is at all to be dierentiated thepolicy of the law which embodies a deeply rooted notion of what is Kust and what isright would be nulli!ed if such irregular relationship instead of being $isited withdisabilities would be attended with bene!ts" Certainly a legal norm should not besusceptible to such a reproach" f there is e$ery any occasion where the principle of statutory construction that what is within the spirit of the law is as much a part of itas what is written, this is it" Otherwise the basic purpose discernible in such codalpro$ision would not be attained" 'hate$er omission may be apparent in aninterpretation purely literal of the language used must be remedied by anadherence to its a$owed obKecti$e"

B" 'e do not thin( that a con$iction for adultery or concubinage is e&acted beforethe disabilities mentioned in Article 789 may eectuate" ore speci!cally, withrecord to the disability on Lpersons who were guilty of adultery or concubinage atthe time of the donation,L Article 789 itself pro$ides: Q"UVwphW5

n the case referred to in -o" 5, the action for declaration of nullity may be broughtby the spouse of the donor or doneeG and the guilty of the donee may be pro$ed bypreponderance of e$idence in the same action"

The underscored clause neatly con$eys that no criminal con$iction for the oense isa condition precedent" n fact, it cannot e$en be from the afore;uoted pro$ision thata prosecution is needed" On the contrary, the law plainly states that the guilt of theparty may be pro$ed Lin the same acting for declaration of nullity of donation" And,



it would be su)cient if e$idence preponderates upon the guilt of the consort for theoense indicated" The ;uantum of proof in criminal cases is not demanded"

n the caw before #s, the re;uisite proof of common0law relationship between theinsured and the bene!ciary has been con$eniently supplied by the stipulationsbetween the parties in the pre0trial conference of the case" t case agreed upon and

stipulated therein that the deceased insured <uena$entura C" Ebrado was marriedto 1ascuala Ebrado with whom she has si& legitimate childrenG that during hislifetime, the deceased insured was li$ing with his common0law wife, CarponiaEbrado, with whom he has two children" These stipulations are nothing less than

Kudicial admissions which, as a conse;uence, no longer re;uire proof and cannot becontradicted" A fortiori, on the basis of these admissions, a Kudgment may be$alidly rendered without going through the rigors of a trial for the sole purpose of pro$ing the illicit liaison between the insured and the bene!ciary" n fact, in thatpretrial, the parties e$en agreed Lthat a decision be rendered based on thisagreement and stipulation of facts as to who among the two claimants is entitled tothe policy"L

ACCO%-2+Z, the appealed Kudgment of the lower court is hereby a)rmed"Carponia T" Ebrado is hereby declared dis;uali!ed to be the bene!ciary of the late<uena$entura C" Ebrado in his life insurance policy" As a conse;uence, the proceedsof the policy are hereby held payable to the estate of the deceased insured" Costsagainst Carponia T" Ebrado"

SO O%E%E"

Teehan(ee .Chairman/, a(asiar, uQGo? 1alma, Fernande? and 2uerrero, JJ",concur"5[wph\5"Q]t

Documents

Insurance Title I to V