Insular Life v. Ebrado - Insurance Proceeds

80 SCRA 181

Facts:

>  Buenaventura Ebrado was issued by Insular Life Assurance Co. a whole life plan for P5,882.00 with a rider for Accidental Death Benefits for the same amount.

>  Ebrado designated Carponia Ebrado as the revocable beneficiary in his policy, referring to her as his wife.

>  Ebrado died when he was accidentally hit by a falling branch of tree.

>  Insurer by virtue of the contract was liable for 11,745.73, and Carponia filed her claim, although she admitted that she and the insured were merely living as husband and wife without the benefit of marriage.

>  Pascuala Ebrado also filed her claim as the widow of the deceased insured.

>  Insular life filed an interpleader case and the lower court found in favor of Pascuala.

Issue:

Between Carponia and Pascuala, who is entitled to the proceeds?

Held:

Pascuala.

It is quite unfortunate that the Insurance Act or our own Insurance Code does not contain a specific provision grossly resolutory of the prime question at hand.  Rather, the general rules of civil law should be applied to resolve this void in the insurance law.  Art. 2011 of the NCC 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 in the insurance law, the contract of life insurance is governed by the general rules of civil law regulating contracts.

Under Art. 2012, NCC: Any person who is forbidden from receiving any donation under Art. 739 cannot be named beneficiary of a life insurance policy by a person who cannot make any donation to him, according to said article.  Under Art. 739, donations between persons who were guilty of adultery or concubinage at the time of the donation shall be void.

In essence, a life insurance policy is no different from civil donations insofar as the beneficiary is concerned.  Both are founded on the same consideration of liberality.  A beneficiary is like a donee because from the premiums of the policy which the insured pays, the beneficiary will receive the proceeds or profits of said insurance.  As a consequence, the proscription in Art. 739 should equally operate in life insurance contracts.

Therefore, since common-law spouses are barred from receiving donations, they are likewise barred from receiving proceeds of a life insurance contract.