FACTS:
The estate of Adolphe Oscar Schuetze is the sole beneficiary named in the life-insurance policy for $10,000, issued by the Sun Life Assurance Company of Canada. During the following five years the insured paid the premiums at the Manila branch of the company. The deceased Adolphe Oscar Schuetze married the plaintiff-appellant Rosario Gelano.

The plaintiff-appellant, the Bank of the Philippine Islands, was appointed administrator of the late Adolphe Oscar Schuetze’s testamentary estate by an order, entered by the Court of First Instance of Manila. The Sun Life Assurance Company of Canada, whose main office is in Montreal, Canada, paid Rosario Gelano Vda. de Schuetze upon her arrival at Manila, the sum of P20,150, which was the amount of the insurance policy on the life of said deceased, payable to the latter’s estate. On the same date Rosario Gelano Vda. de Schuetze delivered the money to said Bank of the Philippine Islands, as administrator of the deceased’s estate, which entered it in the inventory of the testamentary estate, and then returned the money to said widow. The appellee alleges that it is a fundamental principle that a life-insurance policy belongs exclusively to the beneficiary upon the death of the person insured.

ISSUE: Whether or not the life insurance policy belongs to the conjugal partnership.

RULING:
SC holds, (1) that the proceeds of a life-insurance policy payable to the insured’s estate, on which the premiums were paid by the conjugal partnership, constitute community property, and belong one-half to the husband and the other half to the wife, exclusively; and (2) that if the premiums were paid partly with paraphernal and partly conjugal funds, the proceeds are likewise in like proportion paraphernal in part and conjugal in part.

That the proceeds of a life-insurance policy payable to the insured’s estate as the beneficiary, if delivered to the testamentary administrator of the former as part of the assets of said estate under probate administration, are subject to the inheritance tax according to the law on the matter, if they belong to the assured exclusively, and it is immaterial that the insured was domiciled in these Islands or outside.

*Case digest by Hipolito R. Bael, III
Andres Bonifacio College, School Year 2018-2019