Week 6 Case 17 G.R. No. 183526 Flashcards
Was the legal recourse of the petitioner correct?
At the outset, the Court notes that the elevation of the case to us via the instant Petition for Review on Certiorari is not justified. Rule 41, Section
1 of the Rules of Court, provides that no appeal may be taken from an order disallowing or dismissing an appeal. In such a case, the aggrieved
party may file a Petition for Certiorari under Rule 65 of the Rules of Court. Furthermore, the RTC Decision dated 30 August 2007, assailed in this Petition, had long become final and executory. Violeta filed a Motion for Reconsideration thereof, but the RTC denied the same in an Order dated 8 November 2007. The records of the case reveal that Violeta received a copy
of the 8 November 2007 Order on 3 December 2007. Thus, Violeta had 15 days from said date of receipt, or until 18 December 2007, to file a
Notice of Appeal. Violeta filed a Notice of Appeal only on 20 May 2008, more than five months after receipt of the RTC Order dated 8 November 2007 denying her Motion for Reconsideration.
Violeta’s claim that her former counsel’s failure to file the proper remedy within the reglementary period was an honest mistake, attributable
to the latter’s deteriorating health, is unpersuasive.
Violeta merely made a general averment of her former counsel’s poor health, lacking relevant details and supporting evidence. By Violeta’s own
admission, her former counsel’s health rapidly deteriorated only by the first week of July 2008. The events pertinent to Violeta’s Notice of Appeal took place months before July 2008, i.e., a copy of the RTC Order dated 8
November 2007, denying Violeta’s Motion for Reconsideration of the
Decision dated 30 August 2007, was received on 3 December 2007; and Violeta’s Notice of Appeal was filed on 20 May 2008. There is utter lack of
proof to show that Violeta’s former counsel was already suffering from ill health during these times; or that the illness of Violeta’s former counsel would have affected his judgment and competence as a lawyer.
What was the effect of the petitioner’s counsel failure to file a notice of appeal within the allowed reglementary period?
The failure of her former counsel to file a Notice of Appeal
within the reglementary period binds Violeta, which failure the latter cannot now disown on the basis of her bare allegation and self-serving pronouncement that the former was ill. A client is bound by his counsel’s
mistakes and negligence.
The Court, therefore, finds no reversible error on the part of the RTC in denying Violeta’s Notice of Appeal for being filed beyond the reglementary
period. Without an appeal having been timely filed, the RTC Decision dated 30 August 2007 in Civil Case No. 2177 already became final and executory.
A judgment becomes “final and executory” by operation of law. Finality becomes a fact when the reglementary period to appeal lapses and no appeal is perfected within such period. As a consequence, no court (not even this Court) can exercise appellate jurisdiction to review a case or modify a decision that has become final. When a final judgment is executory, it
becomes immutable and unalterable. It may no longer be modified in any respect either by the court, which rendered it or even by this Court. The doctrine is founded on considerations of public policy and sound practice that, at the risk of occasional errors, judgments must become final at some definite point in time.
What are the only recognized exceptions to the doctrine of immutability and unalterability?
The only recognized exceptions to the doctrine of immutability and unalterability are the correction of clerical errors, the so-called nunc pro tunc entries, which cause no prejudice to any party, and void judgments. The
instant case does not fall under any of these exceptions.
What is an insurable interest?
An insurable interest is one of the most basic and essential
requirements in an insurance contract. In general, an insurable interest is that interest which a person is deemed to have in the subject matter insured, where he has a relation or connection with or concern in it, such
that the person will derive pecuniary benefit or advantage from the preservation of the subject matter insured and will suffer pecuniary loss or
damage from its destruction, termination, or injury by the happening of the event insured against. The existence of an insurable interest gives a
person the legal right to insure the subject matter of the policy of insurance. Section 10 of the Insurance Code indeed provides that every person has an insurable interest in his own life. Section 19 of the same code also states that an interest in the life or health of a person insured must exist when the insurance takes effect, but need not exist thereafter or when the loss occurs.
Was the matter of insurable interest important in this case?
Upon more extensive study of the Petition, it becomes evident that the matter of insurable interest is entirely irrelevant in the case at bar. It is actually beyond question that while Eulogio was still alive, he had an
insurable interest in his own life, which he did insure under Policy No. 9011992. The real point of contention herein is whether Eulogio was able to reinstate the lapsed insurance policy on his life before his death on 17
September 1998.
Was Eulogio able to reinstate the lapsed insurance policy on his life before his death?
No.
That Policy No. 9011992 had already lapsed is a fact beyond dispute.
Eulogio’s filing of his first Application for Reinstatement with Insular Life, through Malaluan, on 26 May 1998, constitutes an admission that Policy No. 9011992 had lapsed by then. Insular Life did not act on Eulogio’s first Application for Reinstatement, since the amount Eulogio simultaneously
deposited was sufficient to cover only the P8,062.00 overdue premium for 24 January 1998, but not the P322.48 overdue interests thereon. On 17
September 1998, Eulogio submitted a second Application for Reinstatement to Insular Life, again through Malaluan, depositing at the same time
P17,500.00, to cover payment for the overdue interest on the premium for 24 January 1998, and the premiums that had also become due on 24 April
1998 and 24 July 1998. On the very same day, Eulogio passed away.
What does policy reinstatement mean?
To reinstate a policy means to restore the same to premium-paying status after it has been permitted to lapse. Both the Policy Contract and the Application for Reinstatement provide for specific conditions for the reinstatement of a lapsed policy.
In the instant case, Eulogio’s death rendered impossible full compliance with the conditions for reinstatement of Policy No. 9011992. True, Eulogio, before his death, managed to file his Application for Reinstatement and deposit the amount for payment of his overdue premiums and interests thereon with Malaluan; but Policy No. 9011992 could only be considered reinstated after the Application for Reinstatement had been processed and approved by Insular Life during Eulogio’s lifetime and good health.
What is the jurisprudential ruling on reinstatement, as discussed in Andres v. The Crown Life Insurance Company?
“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 insurer has the right to deny the reinstatement if it is not satisfied as to the insurability of the insured and if the latter
does not pay all overdue premium and all other indebtedness to the insurer. 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.”
Did Malaluan have an authority to process Eulogio’s Application for Reinstatement?
It does not matter that when he died, Eulogio’s Application for
Reinstatement and deposits for the overdue premiums and interests were already with Malaluan. Insular Life, through the Policy Contract, expressly
limits the power or authority of its insurance agents, thus:
Our agents have no authority to make or modify this contract,
to extend the time limit for payment of premiums, to waive any lapsation, forfeiture or any of our rights or requirements, such powers being limited to our president, vice-president or persons authorized by the Board of Trustees and only in writing.
Malaluan did not have the authority to approve Eulogio’s Application for Reinstatement. Malaluan still had to turn over to Insular Life Eulogio’s Application for Reinstatement and accompanying deposits, for processing and approval by the latter.
What are the function of courts as to enforcement of contracts?
Eulogio’s death, just hours after filing his Application for Reinstatement and depositing his payment for overdue premiums and interests with Malaluan, does not constitute a special circumstance that can persuade this Court to already consider Policy No. 9011992 reinstated. Said circumstance cannot override the clear and express provisions of the Policy Contract and Application for Reinstatement, and operate to remove the prerogative of Insular Life thereunder to approve or disapprove the Application for Reinstatement. Even though the Court commiserates with Violeta, as the tragic and fateful turn of events leaves her practically empty-handed, the Court cannot arbitrarily burden Insular Life with the payment of proceeds on a lapsed insurance policy. Justice and fairness must equally apply to all parties to a case. Courts are not permitted to make contracts for the parties. The function and duty of the courts consist simply in enforcing and carrying out the contracts actually made.
Can Violeta claim full refund?
Yes.
Policy No. 9011992 remained lapsed and void, not having been reinstated in accordance with the Policy Contract and Application for Reinstatement before Eulogio’s death. Violeta, therefore, cannot claim any
death benefits from Insular Life on the basis of Policy No. 9011992; but she is entitled to receive the full refund of the payments made by Eulogio
thereon.
How should contracts of insurance be construed?
It is a cardinal principle of insurance law that a policy or
contract of insurance is to be construed liberally in favor of the insured and strictly as against the insurer company, yet, contracts of insurance, like
other contracts, are to be construed according to the sense and meaning of the terms, which the parties themselves have used. If such terms are clear and unambiguous, they must be taken and understood in their plain, ordinary and popular sense.
