Lincoln National Life v. San Juan - Life Insurance

CA GR 34588-88, Nov. 27, 1971

Facts:

>  An employer insured the life of the employee with two insurance companies.

>  The insurance totaled 200T and the only beneficiaries were the employer and his wife.

>  A severed head was later found, purportedly that of the insured employee.

>  The insurance companies refused to pay on the ground that the employer had no insurable interest in the life of the employee.

Issue:

Whether or not the employer can recover the proceeds of a life insurance policy of his employee.

Held:

NO.

The insured was a tenant in a coconut land owned by the employer and his earning were barely that of a farm laborer.  It was established that the insured could not have afforded the insurance policies drawn on his life.  Many more policies were found to have been issued with the employee/tenant as insured and the employer and his wife as beneficiaries.

The policies were also found to have been acquired in quick succession.  It was found that the various postal money orders issued in payment of the premiums were made by the employer.  It appears that, based on the circumstances and evidence, the insurance was really taken out by the employer.