Andres v Crown G.R. No.

L-10874 January 28, 1958

J. J.B.L. Reyes
Facts:
Andres and his wife applied for a policy for Php 5,000. Premiums were paid semiannually, and the amount of P165.15 was paid for two semesters. The third wasnt.
The company to Andres advising them that the policy lapsed and reinstatement was
in 60 days. The policy was allowed to lapse.
Andres and his wife applied for reinstatement. He mailed 100. There was a balance of
65 pesos.
The company assented on the condition that he pay the 65 pesos. He paid.
The wife passed away. The insurance company, however, didnt pay indemnity. They
enclosed a Death Claim Discharge but the plaintiff refused to sign. The company
returned Php 165. Andres returned it as well.
Andres filed a complaint in the CFI against Crown Life Insurance Company for the
recovery of the amount of P5,000, as the face value of a joint 20year endowment insurance policy. Andres presented his death claim as survivorbeneficiary. Payment having been denied, this case was instituted.
The court rendered decision absolving the defendant from any liability on the ground
that the policy having lapsed, it was not reinstated at the time the plaintiffs wife died.
Not satisfied with the decision, plaintiff appealed to the Court of Appeals, but the
appeal was later certified to this Court.
Issue: Whether or not the lapsed policy has been validly and completely reinstated
after said date.
Held: No. Petition dismissed.
Ratio:
The subsequent reinstatement of the policy was provided for in the contract itself in
the following terms:
If this policy lapses, it may be reinstated upon application made within three years
from the date of lapse, and upon production of evidence of the good health of the
injured, and such other evidence of insurability at the date of application for
reinstatement as would then satisfy the Company to issue a new Policy on the same
terms as this Policy, and upon payment of all overdue premiums and other
indebtedness in respect of this Policy, together with interest at six per cent,
compounded annually, and provided also that no change has taken place in such
good health and insurability subsequent to the date of such application and before
this Policy is reinstated.
As stated by the lower court, the conditions set forth in the policy for reinstatement
are the following: (a) application shall be made within three years from the date
of lapse; (b) there should be a production of evidence of the good health of
theinsured: (c) if the rate of premium depends upon the age of the Beneficiary, there
should likewise be a production of evidence of his or her good health; (d) there should
be presented such other evidence of insurability at the date of application for
reinstatement; (e) there should be no change which has taken place in such good
health and insurability subsequent to the date of such application and before the
policy is reinstated; and (f) all overdue premiums and other indebtedness in
respect of the policy, together with interest at six per cent, compounded
annually, should first be paid.

The plaintiff-appellant did not comply with the last condition; for he only paid P100
before his wifes death; and, despite the Companys reminders, he only remitted
the balance 2 days after his wife died. The company had the right to treat the contract
as lapsed and refuse payment of the policy.
Appellant, however, contends that the condition regarding payment of the premium
was waived by the insurance Company by its letters to appellant:
If you can not pay the full amount immediately, send as large an amount as possible
and advise us how soon you expect to be able to pay the balance. Every
consideration will be given to your request consistent with the companys regulations
If you are unable to cover this amount in full, send us as big an amount as you are
able and we will work out an adjustment most beneficial to you.
Nothing in these expressions that would indicate an intention on the insurers part to
waive the full payment of the overdue premium. A waiver must be clear and positive,
and intent to waive shown clearly and convincingly. The statements to the
insured were so vague and indefinite as to require further negotiations between the
parties, for their criteria might differ as to what would be the most beneficial
arrangement.
Upon the other hand, the subsequent letters of the insurance Company indicated that
the Company insisted on the full payment of the premium before the policy was
reinstated.
We may now reinstate your policy if you will kindly remit to us the balance of P65.15
due on your semi-annual premium for November, 1950. Please send us this amount
by return mail and upon its receipt we will in turn send the Certificate of
Reinstatement of your policy, thus rendering it once again in full force and effect.
The company did not consider the partial payment as sufficient consideration for the
reinstatement. Appellants failure to remit the balance before the death of his wife
operated to deprive him of any right to waive the policy and recover the face value.
James McGuire vs. The Manufacturers Life Insurance Co- The stipulation in a
life insurance policy giving the insured the privilege to reinstate it upon
written application does not give the insured absolute right to such reinstatement by
the mere filing of an application. The Company has the right to deny the
reinstatement if it is not satisfied as to the insurability of the insured and if the latter
does no pay all overdue premium and all other indebtedness to the Company. After
the death of the insured the insurance Company cannot be compelled to entertain
an application for reinstatement of the policy because the conditions precedent to
reinstatement can no longer be determined and satisfied.
PEREZ V. CA- PERFECTION OF THE CONTRACT OF INSURANCE
323 SCRA 613 (2000)
Facts:
> Primitivo Perez had been insured with the BF Lifeman Insurance Corporation since
1980 for P20,000.00.
> In October 1987, an agent of Lifeman, Rodolfo Lalog, visited Perez in Quezon and
convinced him to apply for additional insurance coverage of P50,000.00, to avail of
the ongoing promotional discount of P400.00 if the premium were paid annually.
> Primitivo B. Perez accomplished an application form for the additional insurance
coverage. Virginia A. Perez, his wife, paid P2,075.00 to Lalog. The receipt issued by
Lalog indicated the amount received was a "deposit."

> Unfortunately, Lalog lost the application form accomplished by Perez and so on
October 28, 1987, he asked the latter to fill up another application form. On
November 1, 1987, Perez was made to undergo the required medical examination,
which he passed.

Whether or not there was a perfected additional insurance contract.

> Lalog forwarded the application for additional insurance of Perez, together with all
its supporting papers, to the office of BF Lifeman Insurance Corporationn in Quezon
which office was supposed to forward the papers to the Manila office.

Insurance is a contract whereby, for a stipulated consideration, one party undertakes

to compensate the other for loss on a specified subject by specified perils. A contract,
on the other hand, is a meeting of the minds between two persons whereby one binds
himself, with respect to the other to give something or to render some service.

> On November 25, 1987, Perez died while he was riding a banca which capsized
during a storm.
> At the time of his death, his application papers for the additional insurance were
still with the Quezon office. Lalog testified that when he went to follow up the papers,
he found them still in the Quezon office and so he personally brought the papers to
the Manila office of BF Lifeman Insurance Corporation. It was only on November 27,
1987 that said papers were received in Manila.
> Without knowing that Perez died on November 25, 1987, BF Lifeman Insurance
Corporation approved the application and issued the corresponding policy for the
P50,000.00 on December 2, 1987
> Virginia went to Manila to claim the benefits under the insurance policies of the
deceased. She was paid P40,000.00 under the first insurance policy for P20,000.00
(double indemnity in case of accident) but the insurance company refused to pay the
claim under the additional policy coverage of P50,000.00, the proceeds of which
amount to P150,000.00 in view of a triple indemnity rider on the insurance policy.
> In its letter of January 29, 1988 to Virginia A. Perez, the insurance company
maintained that the insurance for P50,000.00 had not been perfected at the time of
the death of Primitivo Perez. Consequently, the insurance company refunded the
amount of P2,075.00 which Virginia Perez had paid
> Lifeman filed for the rescission and the declaration of nullity. Perez, on the other
hand, averred that the deceased had fulfilled all his prestations under the contract
and all the elements of a valid contract are present.
> RTC ruled in favor of Perez. CA reversed.
Issue:

Held:
The contract was not perfected.

Consent must be manifested by the meeting of the offer and the acceptance upon the
thing and the cause which are to constitute the contract. The offer must be certain
and the acceptance absolute. When Primitivo filed an application for insurance, paid
P2,075.00 and submitted the results of his medical examination, his application was
subject to the acceptance of private respondent BF Lifeman Insurance Corporation.
The perfection of the contract of insurance between the deceased and respondent
corporation was further conditioned upon compliance with the following requisites
stated in the application form:
"there shall be no contract of insurance unless and until a policy is issued on this
application and that the said policy shall not take effect until the premium has been
paid and the policy delivered to and accepted by me/us in person while I/We, am/are
in good health."
The assent of private respondent BF Lifeman Insurance Corporation therefore was
not given when it merely received the application form and all the requisite supporting
papers of the applicant. Its assent was given when it issues a corresponding policy to
the applicant. Under the abovementioned provision, it is only when the applicant pays
the premium and receives and accepts the policy while he is in good health that the
contract of insurance is deemed to have been perfected.
It is not disputed, however, that when Primitivo died on November 25, 1987, his
application papers for additional insurance coverage were still with the branch office
of respondent corporation in Gumaca and it was only two days later, or on November
27, 1987, when Lalog personally delivered the application papers to the head office in
Manila. Consequently, there was absolutely no way the acceptance of the application
could have been communicated to the applicant for the latter to accept inasmuch as
the applicant at the time was already dead.