Scribd Logo
Upload

Welcome to Scribd!

  • Case 5 Cormrev 1

    Uploaded by

    Rosalia L. Completano Lpt
    27 views1 page
    1. Grepalife denied a death claim from DBP after Dr. Leuterio died, alleging he concealed a pre-existing health condition. 2. The widow sued Grepalife directly. Grepalife argued the widow was not a real party since the claim was between it and DBP. 3. The Supreme Court found Grepalife liable, as the insurance was on Dr. Leuterio's interest to extinguish his mortgage debt upon death, with any excess to his beneficiaries like his widow. Since the debt was already paid by foreclosing on the property, the proceeds were owed to the widow.

    Original Description:

    Original Title

    CASE 5 CORMREV 1

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    1. Grepalife denied a death claim from DBP after Dr. Leuterio died, alleging he concealed a pre-existing health condition. 2. The widow sued Grepalife directly. Grepalife argued the widow was not a real party since the claim was between it and DBP. 3. The Supreme Court found Grepalife liable, as the insurance was on Dr. Leuterio's interest to extinguish his mortgage debt upon death, with any excess to his beneficiaries like his widow. Since the debt was already paid by foreclosing on the property, the proceeds were owed to the widow.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    27 views1 page

    Case 5 Cormrev 1

    Uploaded by

    Rosalia L. Completano Lpt
    1. Grepalife denied a death claim from DBP after Dr. Leuterio died, alleging he concealed a pre-existing health condition. 2. The widow sued Grepalife directly. Grepalife argued the widow was not a real party since the claim was between it and DBP. 3. The Supreme Court found Grepalife liable, as the insurance was on Dr. Leuterio's interest to extinguish his mortgage debt upon death, with any excess to his beneficiaries like his widow. Since the debt was already paid by foreclosing on the property, the proceeds were owed to the widow.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    of 1

    5.

    Great Pacific Assurance vs Court of Appeals


    Topic: Parties to a Contract

    Facts:

    1. A contract of group life insurance was executed between petitioner Great Pacific Life Assurance Corporation (Grepalife) and DBP wherein Grepalife
    agreed to insure the lives of eligible housing loan mortgagors of DBP. One of the DBP’s morgagors was Dr. Wilfredo Leuterio. He applied for
    membership in the group life insurance plan wherein he answered in the application form, certain questions concerning his health condition by
    answering NO to a question “Have you ever had, or consulted, a physician for a heart condition, high blood pressure, cancer, diabetes, lung; kidney
    or stomach disorder or any other physical impairment?” He answered YES to a question, “Are you now, to the best of your knowledge, in good
    health?”
    2. Because Dr. Leuterio is said to be in good health, Grepalife issued insurance coverage to him, to the extent of his mortgage indebtedness to DBP
    amounting to P86,200.
    3. Later, Dr. Leuterio died due to "massive cerebral hemorrhage." So DBP submitted a death claim to Grepalife. However, Grepalife denied the
    claim alleging that Dr. Leuterio was not physically healthy when he applied for an insurance coverage because Leuterio did not disclose during his
    application that he had been suffering from hypertension, which caused his death. According to Grepalife, the non-disclosure of this material
    fact constitute concealment that justified them to deny the claim of DBP. Because of the denial of Grepalife of its claim, DBP foreclosed the residential
    lot of the spouses Leuterio, in satisfaction of mortgagor's outstanding loan.

    4. By that, the widow of the late Dr. Leuterio (Medarda), private respondent in this case, filed a complaint with the RTC, against Grepalife for Specific
    Performance with Damages.
    5. The trial court rendered a decision in favor of private respondent widow Medarda and against Grepalife which was also later on sustained by the CA.
    Hence this petition by Grepalife insisting that the widow was not the real party in interest in the insurance claim as it was between Grepalife and the
    DBP, and that DBP was not joined in the suit. Moreover, it insisted that it is not liable to DBP as beneficiary in a group of life insurance contract from
    a complaint filed by the widow of the deceased mortgagor.

    Issue: Whether or not the Court of Appeals erred in holding petitioner liable to DBP as beneficiary in a group life insurance contract
    from a complaint filed by the widow of the decedent/mortgagor.

    Held: NO

    1. The Supreme Court held in the Negative. Petitioner Grepalife is liable. However, it is liable not to DBP because the loan was already satisfied
    by foreclosing the house of respondent. Hence, the insurance proceeds shall inure to the benefit of the heirs of the deceased person or his
    beneficiaries, the private respondent widow, in this case.

    2. In resolving the issue in this case, the court considers the insurable interest in mortgaged properties and the parties to the group insurance policy
    or otherwise known as the "mortgage redemption insurance." This mortgage redemption insurance is a device for the protection of both the
    mortgagee and the mortgagor. On the part of the mortgagee or the creditor, it can claim proceeds from such insurance as payment of the mortgage
    debt when the debtor mortgagor dies during the existence of the mortgage contract, his heirs are relieved from paying the obligation. On the other
    hand, on the part of the mortgagor in the event of his death, the mortgage obligation will be extinguished by the application of the
    insurance proceeds to the mortgage indebtedness.
    3. In applying this concept, where the mortgagor pays the insurance premium under the group insurance policy, making the loss payable to the
    mortgagee, the insurance is on the mortgagor's interest and as such, a party to a contract NOT the mortgagee. The Mortgagee is simply an
    appointee of the insurance fund.

    a. Sec. 8 of the Insurance Code provides:


    i. Unless the policy provides, where a mortgagor of property effects insurance in his own name providing that the loss shall be
    payable to the mortgagee, or assigns a policy of insurance to a mortgagee, the insurance is deemed to be upon the interest of
    the mortgagor, who does not cease to be a party to the original contract, and any act of his, prior to the loss, which would
    otherwise avoid the insurance, will have the same effect, although the property is in the hands of the mortgagee, but any act
    which, under the contract of insurance, is to be performed by the mortgagor, may be performed by the mortgagee therein
    named, with the same effect as if it had been performed by the mortgagor.

    4. Hence, as stated in the policy that: "In the event of the debtor's death before his indebtedness with the Creditor [DBP] shall have been fully paid,
    an amount to pay the outstanding indebtedness shall first be paid to the creditor and the balance of sum assured, if there is any,
    shall then be paid to the beneficiary/ies designated by the debtor."

    As I mentioned earlier, since the indebtedness of the insure to DBP had already been settled when DBP FORECLOSED the residential lot of private
    respondent when Grepalife denied its death claim, interposing the defense of concealment committed by the insured, then it cannot anymore claim
    said insurance proceeds. This insurance proceeds will inure to the benefit of his heirs, the widow Medarda is entitled to received

    You might also like