G.R. No. L-44059. October 28, 1977
THE INSULAR LIFE ASSURANCE COMPANY, LTD., PLAINTIFF-APPELLEE, VS. CARPONIA T. EBRADO AND PASCUALA VDA. DE EBRADO, DEFENDANTS-APPELLANTS.
MARTIN, J.:
This is a novel question in insurance law: Can a common-law wife named as beneficiary in
the life insurance policy of a legally married man claim the proceeds thereof
in case of death of the latter?
On September 1, 1968, Buenaventura Cristor Ebrado was issued by
The Insular Life Assurance Co., Ltd., Policy No. 009929 on a whole-life plan
for P5,882.00 with a rider for Accidental Death Benefits for the same
amount. Buenaventura C. Ebrado
designated Carponia T. Ebrado as the revocable beneficiary in his policy. He referred to her as his wife.
On October 21, 1969, Buenaventura C. Ebrado died as a result of
an accident when he was hit by a falling branch of a tree. As the insurance policy was in force, The
Insular Life Assurance Co., Ltd. stands
liable to pay the coverage in the total amount of P11,745.73, representing the
face value of the policy in the amount of P5,882.00 plus the additional
benefits for accidental death also in the amount of P5,882.00 and the refund of
P18.00 paid for the premium due November, 1969, minus the unpaid premiums and
interest thereon due for January and February, 1969, in the sum of P36.27.
Carponia T. Ebrado filed with the insurer a claim for the
proceeds of the policy as the designated beneficiary therein, although she
admits that she and the insured Buenaventura C. Ebrado 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. She asserts that she
is the one entitled to the insurance proceeds, not the common-law wife,
Carponia T. Ebrado.
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 Court of First Instance of
Rizal on April 29, 1970.
After the issues have
been joined, a pre-trial conference was held on July 8, 1972, after which, a
pre-trial order was entered reading as follows:
“During the pre-trial conference, the parties manifested to
the court that there is no possibility of amicable settlement. Hence, the Court proceeded to have the
parties submit their evidence for the purposes of the pre-trial and make admissions
for the purpose of pre-trial. During
this conference, parties Carponia T. Ebrado and Pascuala Ebrado agreed and
stipulated: 1) that the deceased
Buenaventura Ebrado was married to Pascuala Ebrado with whom she has six —
(legitimate) namely; Hernando, Cresencio, Elsa, Erlinda, Felizardo and Helen,
all surnamed Ebrado; 2) that during the lifetime of the deceased, he was
insured with Insular Life Assurance Co. under Policy No. 009929 whole life
plan, dated September 1, 1968 for the sum of P5,882.00 with the rider for
accidental death benefit as evidenced by Exhibits A for plaintiffs and Exhibit
1 for the defendant Pascuala and Exhibit 7 for Carponia Ebrado; 3) that
during the lifetime of Buenaventura Ebrado, he was living with his common-law
wife, Carponia Ebrado, with whom she had 2 children although he was not legally
separated from his legal wife; 4) that
Buenaventura Ebrado died by accident on October 21, 1969 as evidenced by the
death certificate Exhibit 3 and affidavit of the police report of his death
Exhibit 5; 5) that complainant Carponia Ebrado filed claim with the Insular
Life Assurance Co. which was contested by Pascuala Ebrado who also filed claim
for the proceeds of said policy; 6) that in view of the adverse claims the
insurance company filed this action against the two herein claimants Carponia
and Pascuala Ebrado; 7) that there is now due from the Insular Life Assurance
Co. as proceeds of the policy P11,745.73; 8) that the beneficiary designated
by the insured in the policy is Carponia Ebrado and the insured made
reservation to change the beneficiary but although the insured made the option
to change the beneficiary, same was never changed up to the time of his death
and the legal wife did not have any opportunity to write the company that there
was reservation to change the designation of the beneficiary; and 9) the
parties agreed that a decision be rendered based on this agreement and
stipulation of facts as to who among the two claimants is entitled to the
policy.
“Upon motion of the parties, they are given ten (10) days to
file their simultaneous memoranda from the receipt of this order.
SO ORDERED.”
On September 25, 1972, the trial court rendered judgment
declaring, among others, Carponia T. Ebrado disqualified from becoming
beneficiary of the insured Buenaventura Cristor
Ebrado and directing the payment of the insurance proceeds to the estate of the
deceased insured. The trial court held:
“It is patent from the last paragraph of Art. 739 of the
Civil Code that a criminal conviction for adultery or concubinage is not
essential in order to establish the disqualification mentioned therein. Neither is it also necessary that a finding
of such guilt or commission of those acts be made in a separate independent
action brought for the purpose. The
guilt of the donee (beneficiary) may be proved by preponderance of evidence in
the same proceeding (the action brought to declare the nullity of the
donation).
It is, however, essential that such adultery or concubinage exists
at the time defendant Carponia T. Ebrado was made beneficiary in the policy in
question for the disqualification and incapacity to exist and that it is only
necessary that such fact be established by preponderance of evidence in the
trial. Since it is agreed in their
stipulation above-quoted that the deceased insured and defendant Carponia T.
Ebrado were living together as husband and wife without being legally married
and that the marriage of the insured with the other defendant Pascuala Vda. de
Ebrado was valid and still existing at the time the insurance in question was
purchased there is no question that defendant Carponia T. Ebrado is
disqualified from becoming the beneficiary of the policy in question and as such she is not entitled to the
proceeds of the insurance upon the death of the insured.”
From this judgment,
Carponia T. Ebrado appealed to the Court of Appeals, but on July 11, 1976, the
Appellate Court certified the case to Us as involving only questions of law.
We affirm the judgment of the lower court.
1. It is quite unfortunate
that the Insurance Act (RA 2327, as amended) or even the new Insurance Code (PD
No. 612, as amended) does not contain any
specific provision grossly resolutory of the prime question at
hand. Section 50 of the Insurance Act
which provides that “(t)he insurance shall be applied exclusively to the
proper interest of the person in whose name it is made”[1]
cannot be validly seized upon to hold that the same includes the
beneficiary. The word
“interest” highly suggests that the provision refers only to the
“insured” and not to the beneficiary, since a contract of insurance
is personal in character.[2]
Otherwise, the prohibitory laws against illicit relationships especially on
property and descent will be rendered nugatory, as the same could easily be
circumvented by modes of insurance.
Rather, the general rules of civil law should be applied to resolve this
void in the Insurance Law. Article 2011
of the New Civil Code 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 by the Insurance Law, the contract of life insurance
is governed by the general rules of the civil law regulating contracts.[3]
And under Article 2012 of the same Code, “any person who is forbidden from
receiving any donation under Article 739 cannot be named beneficiary of a life
insurance policy by the person who cannot make a donation to him.”[4]
Common-law spouses are, definitely, barred from receiving donations each
other. Article 739 of the new Civil Code
provides:
“The following donations shall be void:
“1. Those made between persons who were guilty
of adultery or concubinage at the time of donation;
“2. Those made between persons found guilty of the
same criminal offense, in consideration thereof;
“3. Those made to a public officer or his wife,
descendants or ascendants by reason of his office.
“In the case referred to in No. 1, the action for declaration
of nullity may be brought by the spouse of the donor or donee; and the guilt
of the donee may be proved by preponderance of evidence in the same action.”
2. In essence, a life
insurance policy is no different 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. The mandate of Article 2012 cannot be laid
aside: any person who cannot receive a
donation cannot be named as beneficiary in the life insurance policy of the
person who cannot make the donation.[5]
Under American law, a policy of life insurance is considered as a testament and
in construing it, the courts will, so far as possible treat it as a will and
determine the effect of a clause designating the beneficiary by rules under
which wills are interpreted.[6]
3. Policy considerations and
dictates of morality rightly justify the institution of a barrier between
common-law spouses in regard to property relations since such relationship
ultimately encroaches upon the nuptial and filial rights of the legitimate
family. There is every reason to hold
that the bar in donations between legitimate spouses and those between
illegitimate ones should be enforced in life insurance policies since the same
are based on similar consideration. As
above pointed out, a beneficiary in a life insurance policy is no different
from a donee. Both are recipients of
pure beneficence. So long as marriage
remains the threshold of family laws, reason and morality dictate that the
impediments imposed upon married couple should likewise be imposed upon
extra-marital relationship. If
legitimate relationship is circumscribed by these legal disabilities, with more
reason should an illicit relationship be restricted by these disabilities. Thus, in Matabuena v. Cervantes,[7]
this Court, through Justice Fernando, said:
“If the policy of the law is, in the language of the opinion
of the then Justice J.B.L. Reyes of that court (Court of Appeals), ‘to prohibit
donations in favor of the other consort and his descendants because of fear
and undue and improper pressure and influence upon the donor, a prejudice
deeply rooted in our ancient law; “por que no se engañen despojandose el
uno al otro por amor que han de consuno’ (according to) the Partidas (Part IV,
Tit. XI, LAW IV), reiterating the rationale ‘No mutuato amore invicem spoliarentur’
of the Pandects (Bk. 24, Tit. I, De donat, inter virum et uxorem); then there
is every reason to apply the same prohibitive policy to persons living together
as husband and wife without the benefit of nuptials. For it is not to be doubted that assent to
such irregular connection for thirty years bespeaks greater influence of one
party over the other, so that the danger that the law seeks to avoid is
correspondingly increased. Moreover, as
already pointed out by Ulpian (in his lib. 32 ad Sabinum, fr. 1), ‘it would not
be just that such donations should subsist, lest the condition of those who
incurred guilt should turn out to be better.’ So long as marriage remains the
cornerstone of our family law, reason and morality alike demand that the disabilities
attached to marriage should likewise attach to concubinage.
It is hardly necessary to add that even in the absence of the above
pronouncement, any other conclusion cannot stand the test of scrutiny. It would be to indict the framers of the Civil
Code for a failure to apply a laudable rule to a situation which in its
essentials cannot be distinguished.
Moreover, if it is at all to be differentiated the policy of the law
which embodies a deeply rooted notion of what is just and what is right would
be nullified if such irregular relationship instead of being visited with disabilities
would be attended with benefits.
Certainly a legal norm should not be susceptible to such a
reproach. If there is every any occasion
where the principle of statutory construction that what is within the spirit of
the law is as much a part of it as what is written, this is it. Otherwise the basic purpose discernible in
such codal provision would not be attained.
Whatever omission may be apparent in an interpretation purely literal of
the language used must be remedied by an adherence to its avowed
objective.”
4. We do not think that a
conviction for adultery or
concubinage is exacted before the disabilities mentioned in Article 739 may
effectuate. More specifically, with
regard to the disability on ”persons who were guilty of adultery or
concubinage at the time of the donation,” Article 739 itself provides:
“In the case referred to in No. 1, the action for declaration of nullity may be brought
by the spouse of the donor or donee; and the guilt of the donee may be
proved by preponderance of evidence in the same action.”
The underscored clause neatly conveys that no criminal conviction
for the disqualifying offense is a condition precedent. In fact, it cannot even be gleaned from the
aforequoted provision that a criminal prosecution is needed. On the contrary, the law plainly states that
the guilt of the party may be proved “in the same action” for
declaration of nullity of donation. And,
it would be sufficient if evidence preponderates upon the guilt of the consort
for the offense indicated. The quantum
of proof in criminal cases is not demanded.
In the case before Us, the 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. It was agreed upon and
stipulated therein that the deceased insured Buenaventura C. Ebrado was
married to Pascuala Ebrado with whom she has six legitimate children; that
during his lifetime, the deceased insured was living with his common-law wife,
Carponia Ebrado, with whom he has two children.
These stipulations are nothing less than judicial admissions
which, as a consequence, no longer require proof and cannot be contradicted.[8]
A fortiori, on the basis of these admissions, a judgment may be validly
rendered without going through the rigors of a trial for the sole purpose of
proving the illicit liaison between the insured and the beneficiary. In fact, in that pre-trial, the parties even
agreed “that a decision be rendered based on this agreement and
stipulation of facts as to who among the two claimants is entitled to the
policy.”
ACCORDINGLY, the appealed judgment of the lower court is
hereby affirmed. Carponia T. Ebrado is
hereby declared disqualified to be the beneficiary of the late Buenaventura
C. Ebrado in his life insurance policy.
As a consequence, the proceeds of the policy are hereby held payable to
the estate of the deceased insured. Costs
against Carponia T. Ebrado.
SO ORDERED.
Teehankee, (Chairman), Makasiar, Muñoz Palma, Fernandez, and Guerrero, JJ., concur.
[1]
Sec. 53 of PD 612 provides: “The insurance proceeds shall be applied
exclusively to the proper interest of the person in whose name or for whose
benefit it is made unless otherwise specified in the policy.”
[2]
See Vance, at 99.
[3]
Musñgi v. West Coast Life
Insurance Co., 61 Phil. 867 (1935).
[4]
See Tolentino, Civil Code, Vol. II,
1972 ed., at 525-26.
[5]
See Padilla, Civil Code Anno., Vol. VI,
1974 ed., at 501.
[6]
44 Am Jur 2d 639.
[7]
38 SCRA 287-88 (1971).
[8]
PVTA v. Delos Angeles, 61 SCRA
489 (1974).