G.R. No. L-5921. March 29, 1954

This is an appeal from a decision of the Court of First Instance of
Manila ordering defendant to pay to plaintiff the sum of P3,000,
Philippine currency, plus legal interest thereon from the time of the
filing of the complaint until its full payment.

On April 14, 1943, the National Life Insurance Company of the
Philippines issued a policy on the life of Jose C. Londres whereby it
undertook to pay its beneficiary upon his death the sum of P3,000. All
the premiums due under the policy were actually paid on their dates of
maturity and the policy was in force when the insured died on February
7, 1945. Salvacion B. Londres, as beneficiary, demanded from the
company the payment of the proceeds of the policy, and her demand
having been refused, she instituted the present action against the
company in the Court of First Instance of Manila.

Defendant in its answer denied, for lack of sufficient proof, the
allegation that the insured died on February 7, 1945, and set up the
following special defenses: (a) that plaintiff’s claim is covered by the Moratorium Law; (b)
that the policy having been issued during the Japanese occupation, it
is presumed that its face value should be paid in Japanese currency,
there being no provision in the policy from which can be inferred that
the parties contemplated payment in any other currency; (c)
that the money paid by the insured as premiums, together with the money
received from other policy-holders, was all deposited by the defendant
in the Philippine National Bank and said deposit was declared without
value by Executive Order No. 49 of the President of the Philippines;
and (d) that the policy having been issued under abnormal
circumstances, it should be considered in the light of equity which
does not permit anyone to enrich himself at the expense of another.
Defendant, however, as a proof of good faith, offered to pay the value
of the policy in accordance with the Ballantyne scale of values, or the
sum of P2,400, Philippine currency.

On April 15, 1952, plaintiff filed a motion for summary judgment
supported by an affidavit which contains a restatement of the
allegations of the complaint attaching thereto in support of the motion
certain annexes and affidavits which are intended to substantiate and
prove said allegations. Defendant, answering this motion, stated that
while it joins the plaintiff in her petition for summary judgment, it
does so only in so far as its defense of moratorium is concerned, but
not as regards the merits of the case because its answer raises
questions of fact which should be established, not by mere affidavits,
but by evidence duly presented in court. And on May 15, 1952, the court
rendered decision not only on the question of moratorium but on the
merits of the case, apparently disregarding the issue raised by
defendant as regards the necessity of presenting evidence on the facts
controverted by it in its answer. From this decision, the defendant has
appealed.

One of the errors assigned by appellant refers to the fact that the
lower court rendered judgment on the merits by virtue merely of the
motion for summary judgment: filed by appellee without giving an
opportunity to appellant to present evidence on the facts on which, it
alleges, its answer and special defenses are predicated. Appellant
contends that the facts raised by its special defenses are “triable
issues of facts” which cannot be the subject of summary judgment unless
established by sufficient evidence, and that those facts are material
to sustain its point of view that it can only be made to pay under the
policy an indemnity in the amount of P2,400.

When appellee filed a motion for summary judgment upon her claim she
attached thereto in support of the motion certain annexes and
affidavits which were intended to substantiate and prove her
allegations. Appellant failed not only to interpose opposing affidavits
but announced to the court that it was joining the appellee in her
petition for summary judgment although it evinced its desire to present
evidence with regard to the questions of facts raised in its special
defenses. And acting on said motion, the lower court, after considering
the pleadings and affidavits submitted in support of the motion for
summary judgment, found that there was no substantial triable issue of
facts and concluded that the appellee was entitled to a judgment as a
matter of law. We find this to be in substantial compliance with the
rules (sections 1 and 2, Rule 36).

The material averments of the claim as regards the execution of the
policy, the payment of the premiums, and the death of the insured, are
not disputed. The only issues of fact which served as basis for the
opposition to the summary judgment are those raised in the special
defenses contained in the answer. But these facts are not material for
a decision on the merits, as correctly stated by the lower court, for
even if they are taken for granted the result would not materially
change the findings as to the question affecting the main claim. We
hold therefore that the lower court did not err in rendering a summary
judgment on the merits of the case.

The issue of moratorium, which was decided against the stand taken
by appellant, and which is also raised as one of the errors, has now
become moot in view of the ruling in the case of Rutter vs. Esteban,
93 Phil., 68, wherein the Moratorium Law was declared invalid and
unconstitutional.

The main question to be determined refers to the amount to be paid
by appellant under the policy by way of indemnity to the insured.
Stated in another way, the question to be determined is whether the
amount of P3,000 which appellant bound itself to pay to the insured
under the policy upon his death should be paid in accordance with the
present currency or should be adjusted under the Ballantyne scale of
values. The answer to the question would depend upon the interpretation
to be placed on the facts surrounding the death of the insured.

It appears that the deceased took up the policy under consideration
on April 15, 1943 for the sum of P3,000. All the premiums due under the
policy were actually paid on their dates of maturity and the policy was
in force when the insured died on February 7, 1945. On said date, the
battle for the liberation of the City of Manila was still raging. While
the northern part may have been liberated, not so the southern part, as
shown from the very affidavits submitted by appellee wherein it was
stated that on the aforesaid date, the insured, Jose Londres, and his
two sons were taken by the Japanese soldiers from their house at
Singalong Street and were massacred by their captors. It may therefore
be said that the policy became due when the City of Manila was still
under the yoke of the enemy and became payable only after liberation
which took place on March 10,1945 when President Osmena issued
Proclamation No. 6 following the restoration of the civil government by
General Douglas MacArthur. And we say that the policy became payable
only after liberation even if it matured sometime before, because
before that eventuality the insurance company, appellant herein, was
not yet in a position to pay the value of the policy for the simple
reason that it had not yet reopened. This much the court can take
judicial notice of, for during those days of liberation, while the
people were rejoicing because of the happy event, the banks, the
insurance companies, and for that matter other commercial and business
firms, were still feeling the adverse effects of the sudden fall of
values and were uncertain and apprehensive as to the manner the
readjustment would be made by the new Government. It is for this reason
that the beneficiary, after realizing the truth about the death of her
husband, and after gathering evidence to substantiate his death, had
difficulty in effecting the collection of her claim from the insurance
company because at that time it had not yet reopened for business
purposes. Although the record does not disclose the exact date on which
the insurance company reopened for this purpose, this Court can take
judicial notice that it only did so after liberation. At that time the
legal tender was already the present currency.

However, it is an undisputed fact that the beneficiary submitted to
the company formally her claim and demanded payment thereof on May 16,
1949, attaching thereto sufficient proof of the death of the insured,
which claim however the company did not entertain, not because the
proof submitted was not sufficient in contemplation of law, but because
the policy was executed during the occupation and the determination of
its value has not yet been passed upon by the Government. And following
the provisions of our Insurance Law to the effect that in case of
maturity by death the proceeds are payable within sixty days after the
presentation of the claim and the filing of proof of death, the
conclusion is inescapable that from the point of view of the insurance
company, the proceeds of the policy became payable only upon the
expiration of that period. (Insurance Law, Section 91-A). In this
sense, this case may be likened to those already decided by this Court
wherein we said in substance that, where the parties have agreed that
the payment of the obligation will be made in the currency that would
prevail by the end of the stipulated period, and this takes place after
liberation, the obligation shall be paid in accordance with the
currency then prevailing, or Philippine currency. (Rono vs. Gomez, 83
Phil., 890, 46 Off. Gaz., Sup. 11, 339; Gomez vs. Tabia, 84 Phil., 269,
47, Off. Gaz., 641.) We are, therefore, persuaded to conclude, on the
strength of these authorities, that the present claim should be paid in
accordance with the present legal tender, or the Philippine currency.

With regard to the sufficiency of the proof presented by appellee as
to the death of the insured, we find that the same has been
sufficiently established in view of the death certificate issued by the
Civil Register of Manila on April 15, 1952, which was attached to the
motion for summary judgment. This certificate strengthens the proof
submitted by appellee on May 16, 1949 and as such it can serve as basis
for the determination of the interest that the company should pay under
the policy as required by law. (Insurance Law, Section 91-A). However,
the lower court, contrary to the claim of appellant, only required said
appellant to pay legal interest from the filing of the complaint until
the payment of the judgment.

As final plea, appellant invokes equity in its favor in view of the
nullification of the deposits made by it with the Philippine National
Bank of all fiat money received from its policyholders, which money was
declared without value by Executive Order No. 49 of the President of
the Philippines. Appellant claims that, considering the unexpected
circumstances that developed, the indemnity to be paid by it should be
ameliorated. This loss, painful as it is, should be suffered by it
under Article 307 of the Code of Commerce which provides: “When the
deposits are of cash, with a specification of the coins constituting
them, * * * the increase or reduction which their value may suffer
shall, be for the account of the depositor.” Moreover, appellant, by
entering into an insurance contract, cannot claim, if it suffers loss,
that the beneficiary cannot enrich herself at its expense. This is a risk attendant to any wagering contract.^[1] One who gambles and loses cannot be heard to complain of his loss. To appellant, we can only repeat the following admonition:

“The parties herein gambled and speculated on the date of the
termination of the war and the liberation of the Philippines by the
Americans. This can be gleaned from the stipulation about redemption,
particularly that portion to the effect that redemption could be
effected not before the expiration of one year from June 24, 1944. This
kind of agreement is permitted by law. We find nothing immoral or
unlawful in it.” (Gomez vs. Tabia, supra.)

Wherefore, the decision appealed from is affirmed, with costs against appellant.

Bengzon, Reyes, Jugo, Labrador, Concepcion, and Diokno, JJ., concur.

Paras, C. J., concurs in the result

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^[1] A wager may take the form of
a contract, called wagering, or gambling, contract. Contracts of this
nature include various common forms of valid commercial contracts, as
contracts of insurance, contracts dealing in futures, options, etc.
(Webster’s New International Dictionary, 2nd ed. (unabridged) p. 2863.)