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ANDREW PALERMO, plaintiff-appellee, vs. PYRAMID INSURANCE CO., INC.

,
defendant- appellant.
G.R. No. L-36480 May 31, 1988
FACTS:
On March 7, 1969, the insured, appellee Andrew Palermo, filed a complaint in the
Court of First Instance of Negros Occidental against Pyramid Insurance Co., Inc., for
payment of his claim under a Private Car Comprehensive Policy MV-1251 issued by
the defendant (Exh. A). In its answer, the appellant Pyramid Insurance Co., Inc.,
alleged that it disallowed the claim because at the time of the accident, the insured
was driving his car with an expired driver's license. After the trial, the court a quo
rendered judgment on October 29, 1969 ordering the defendant "to pay the plaintif
the sum of P20,000.00, value of the insurance of the motor vehicle in question and
to pay the costs." On November 26, 1969, the plaintif filed a "Motion for Immediate
Execution Pending Appeal." It was opposed by the defendant, but was granted by
the trial court on December 15, 1969.
ISSUE:
Whether or Not plaintif was not authorized to drive the insured motor vehicle
because his driver's license had expired.
RULING:
There is no merit in the appellant's allegation that the plaintif was not authorized to
drive the insured motor vehicle because his driver's license had expired. The driver
of the insured motor vehicle at the time of the accident was, the insured himself,
hence an "authorized driver" under the policy. While the Motor Vehicle Law prohibits
a person from operating a motor vehicle on the highway without a license or with an
expired license, an infraction of the Motor Vehicle Law on the part of the insured, is
not a bar to recovery under the insurance contract. It however renders him subject
to the penal sanctions of the Motor Vehicle Law. The requirement that the driver be
"permitted in accordance with the licensing or other laws or regulations to drive the
Motor Vehicle and is not disqualified from driving such motor vehicle by order of a
Court of Law or by reason of any enactment or regulation in that behalf," applies
only when the driver" is driving on the insured's order or with his permission." It
does not apply when the person driving is the insured himself.
JEWEL VILLACORTA vs. THE INSURANCE COMMISSION
G.R. No. L-54171, 28 October 1980
FACTS:
Villacorta had her Colt Lancer car insured with Empire Insurance Company against
own damage, theft and 3 rd party liability. While the car was in the repair shop, one of
the employees of the said repair shop took it out for a joyride after which it figured
in a vehicular accident. This resulted to the death of the driver and some of the
passengers as well as to extensive damage to the car. Villacorta filed a claim for
total loss with the said insurance company. However, it denied the claim on the
ground that the accident did not fall within the provisions of the policy either for the
Own Damage or Theft coverage, invoking the policy provision on Authorized Driver
Clause. This was upheld by the Insurance Commission further stating that the car
was not stolen and therefore not covered by the Theft Clause because it is not
evident that the person who took the car for a joyride intends to permanently
deprive the insured of his/ her car.

ISSUE:
Whether or not the insurer company should pay the said claim
HELD:
Yes. Where the insureds car is wrongfully taken without the insureds
consent from the car service and repair shop to whom it had been entrusted for

check-up and repairs (assuming that such taking was for a joy ride, in the course of
which it was totally smashed in an accident), respondent insurer is liable and must
pay insured for the total loss of the insured vehicle under the Theft Clause of the
policy. Assuming, despite the totally inadequate evidence, that the taking was
temporary and for a joy ride, the Court sustains as the better view that which
holds that when a person, either with the object of going to a certain place, or
learning how to drive, or enjoying a free ride, takes possession of a vehicle
belonging to another, without the consent of its owner, he is guilty of theft because
by taking possession of the personal property belonging to another and using it, his
intent to gain is evident since he derives therefrom utility, satisfaction, enjoymet
and pleasure.
ACCORDINGLY, the appealed decision is set aside and judgment is hereby
rendered sentencing private respondent to pay petitioner the sum of P35,000.00
with legal interest from the filing of the complaint until full payment is made and to
pay the costs of suit.
The Insular Life Assurance Co. Ltd. v. Ebrado (1977)
G.R. No. L-44059 October 28, 1977
FACTS:
September 1, 1968, Buenaventura Cristor Ebrado was issued by The Insular
Life Assurance Co., Ltd., Policy on a whole-life for P5,882.00 with a rider for
Accidental Death and designated Carponia T. Ebrado as the revocable beneficiary in
his policy. October 21, 1969, Buenaventura was hit by a falling branch and died.
Carponia filed a claim as the designated beneficiary, although she admits that they
were merely living as husband and wife without the benefit of marriage. Pascuala
Vda. de Ebrado also filed her claim as the widow of the deceased insured. In doubt
as to whom the insurance proceeds shall be paid, the insurer, The Insular Life
Assurance Co., Ltd. commenced an action for Interpleader before the CFI. CFI ruled
that Carponia was disqualified because of adultery. Further, CA, affirmed CFI
decision.
ISSUE:
Whether or Not Carponia is disqualified for violating the Civil Code which
supplements the silent Insurance Code
HELD:
YES. CA affirmed. Common-law spouses are, definitely, barred from receiving
donations from each other. In essence, a life insurance policy is no diferent from a
civil donation insofar as the beneficiary is concerned. Both are founded upon the
same consideration: liberality. A beneficiary is like a donee, because from the
premiums of the policy which the insured pays out of liberality, the beneficiary will
receive the proceeds or profits of said insurance. As a consequence, the proscription
in Article 739 of the new Civil Code should equally operate in life insurance
contracts. We do not think that a conviction for adultery or concubinage is exacted
before the disabilities mentioned in Article 739 may efectuate. Requisite proof of
common-law relationship between the insured and the beneficiary has been
conveniently supplied by the stipulations between the parties in the pre-trial
conference of the case.
Del Val vs Del Val
Facts:
Plaintifs and defendant are brothers and sisters and only heirs to Gregorio
Nacianceno del Val who died August 4, 1910. During his lifetime he took out
insurance on his life for P40,000 payable to defendant as sole beneficiary.
Defendant collected face of the policy and used P18,365.20 to redeem certain real
estate through his attorney in the name of plaintif and defendant. Defendant
declares redemption under name of plaintif was without his knowledge or consent.

Plaintifs contend that the amount of the insurance policy belonged to the estate
and not to defendant personally therefore they are entitled to partition thereof.
Issue:
Did the trial court err in declaring that the proceeds of policy belong
exclusively to defendant?
Held:
No. The proceeds of an insurance policy belong exclusively to the beneficiary
and not to the estate of the person whose life was insured, and that such proceeds
are the separate and individual property of the beneficiary, and not of the heirs of
the person whose life was insured. Neither can they be considered donations or gifts
and therefore determined by Civil Code provisions relating to donations. The
contract of life insurance is a special contract and the destination of the proceeds
thereof is determined by special laws which deal exclusively with that subject. As
regards the property repurchased, the property does not belong to the heirs in
common unless it is established by evidence that it was the intention of the
defendant that the other heirs enjoy with him ownership of the state.
Heirs of Loreto C. Maramag v Maramag (2009)
G.R. No. 181132 June 5, 2009
FACTS:
Petitioners in this case are the legitimate heirs of deceased Loreto. The petitioners
were not named as beneficiaries in the insurance policies issued by Insular and
Grepalife. Petitioners claim that Eva, the concubine of Loreto and a suspect in his
murder, is disqualified from being designated of the insurance policies. They further
add that Evas children with Loreto, being illegitimate children, are entitled to a
lesser share of the proceeds of the policies. Thus, they prayed that the share of Eva
and portions of the share of Loretos illegitimate children should be awarded to
them, being the legitimate
heirs of Loreto entitled to their respective legitimes.
ISSUE:
Whether or not the proceeds should be awarded to the petitioners
HELD:
No. The insurance contracts are governed by specials laws. Petitioners are
third parties to the insurance contracts with Insular and Grepalife and thus they are
not entitled to the proceeds thereof. The Insular and Grepalife have no legal
obligation to turn over the insurance proceeds to the petitioner. It is only in cases
where the insured has not designated any beneficiary, or when the designated
beneficiary is disqualified by law to receive the proceeds, that the insurance policy
proceeds shall redound to the benefitof the estate of the insured.