1949, 47 OG 3012

FACTS:

This action was instituted by the minors Vicentita Antigua Paulin and Silvina Paulin, who are sisters assisted by their guardian ad-litem, for the purpose of collecting the amount of three life insurance policies issued by the defendant, the Insular Life Assurance Co. ltd. In favor of their father, Estaban Paulin, who is alleged to have been killed by the guerillas, on or about December 10, 1943.

The aforementioned policies are Policy no. 84029 in the sum of P 2,000, issued on August 1, 1940, with premiums payable on the first day of August of each year, for 20 years and the second Policy No. 84683, in the sum of P 2, 000, issued on October 1, 1940, with premiums payable on the first day of October of each year, for 20 years and Policy No. 85061, in the sum of P7, 000 issued on October 1, 1940, with premiums payable on the first day of every month, for 20 years. The three policies carried an accidental death benefit clause, providing for double indemnity in case of death, under the conditions therein set forth, and named the plaintiffs as beneficiaries in such case.

Upon demand, made on behalf of the plaintiffs, the defendant refused to pay the sums stated in said policies, on the ground that the same had lapsed, prior to the date of death of Esteban Paulin, for non-payment of premiums. Hence complaint herein, which, after due trial, was dismissed by the RTC.

Appellee admits having received, in connection with policy no 84029, the annual premiums due on August 1, 1940 and August 1, 1941; in connection with policy no. 84683, the annual premiums due on October 1, 1940, and October 1, 1941; and in connection with policy no. 85061, fifteen monthly premiums which fell due from October 1, 9140 to December 1, 1941, inclusive.

ISSUE:

Whether or not the policies have lapsed for the non-payment of premium

RULING:

Despite appellant’s assertion to the contrary, no evidence whatsoever of such payment, in relation to the policies nos. 84029 and 84683, has been introduced. Despite appellant’s testimonial and documentary evidence, they do not bear any contention.

Exhibit B only showed a provisional receipt for the initial premium paid on October 11, 1940 and the acceptance letter by Esteban Paulin were only submitted in connection with Policy No. 84683.
Exhibit c, with reference to Policy no. 85061, were letters written by Esteban Paulin to the defendant on the first day of May, July and November 1942 and March, April, June and July 1943, respectively, each stating that it enclosed a post office money order for P36.12, which, presumably represented the monthly premiums falling due in the months already mentioned. But these were not part of the records of the defendant company but found among the personal belongings of the deceased Esteban Paulin. Each of the letters in the exhibit bore the signature of Esteban which the Court finds them to be originals. Having remained in the possession of its writer, it tends to show that the premiums for the months specified were not forwarded to the defendant.
It is urged also that, in view of the Executive Order No. 25, series of 1944, as amended by Executive Order No. 32, series of 1945, providing for a moratorium in the enforcement of payment of all debts or monetary obligations contracted prior to the liberalization of the Philippines by the American forces, the policies could not and did not lapse for non-payment of the premiums. This contention is untenable, for an insured is not under the obligation to pay premiums. The same do not constitute a debt and the insurance company cannot compel payment thereof, which is one only of the conditions for the subsistence or effectivity of an insurance policy.
While the payment of premiums or assessments as specified in the insurance contract is necessary to bind the insurer to discharge its obligations imposed by the contract, it is generally true in the case of life insurance contracts that there is no absolute undertaking to pay the premiums or assessment and, consequently, no personal liability of the insurer, and the insured, if he has not expressly promised to pay, is at liberty to refuse to make the payment.

*Case digest by Carolyn Kaye A. Tulang, LLB-4, Andres Bonifacio Law School, SY 2018-2019